The naira devaluation has increased Nigeria’s external debt by about N30.03 trillion between 2023 and June 2024, which is considered in naira terms.

When calculated using the current exchange rate, Nigeria’s debt in dollars has made the country’s foreign debts more expensive in the local currency.

The impact of naira’s crash on Nigeria’s debt

Data from the Debt Management Office (DMO) shows that as of June 1, last year, Nigeria’s external debt was $43.16 billion.

The exchange rate of N770.30 to a dollar amounted to N33.25 trillion.

However, by June 1, 2024, the naira depreciated by over 47%, with the FX rate hitting N1,470.19 per dollar.

Due to the naira crash, Nigeria’s external debt, which was reduced to $42.90 billion, now equals N63.07 trillion in naira terms.

Nigeria’s external debt declined by 0.60% in dollars or $258.18 million between June 2023 and the same month in 2024.

In naira terms, there was a spike of over 89% or N29.82 trillion in the same period.

Findings reveal that if the June 2023 exchange rate were used, Nigeria’s external debt would have been N33.05 trillion.

The development further shows that the naira devaluation added N30.02 trillion to the country’s external debt in one year as Nigeria battles weak currency and rising debt.

While the nominal value of Nigeria’s foreign debt in dollars has been stable, the naira depreciation has raised the naira equivalent.

Further findings showed that external debt accounted for 46.96% of Nigeria’s external debt as of June 2024, from 38.05% reported in the same period in 2023.

Nigeria’s debt to organisations

Also, multilateral lenders remain Nigeria’s largest creditors, amounting to half of the country’s debt as of June 2024.

The creditors include the International Monetary Fund (IMF), the World Bank Group, the African Development Bank Group (AfDB), the Islamic Development Bank (IDB) and others.

Punch reports that Nigeria owes the IMF about $1.61 billion, representing 3.75% of the total external debt.

Nigeria is indebted to the World Bank Group for $16.32 billion, with the majority owed to the International Development Association (IDA), accounting for $16.32 billion, 38% of Nigeria’s total foreign debt.

The Nigerian government owes $484 million to another arm of the World Bank, the International Bank for Reconstruction and Development.

Nigeria’s debt to AfDB is $3.87 billion, representing 9.03% of the total external debt.

Nigeria is indebted to the Arab Bank for Economic Development in Africa about $4.97 million, representing 0.01% of the country’s external debt.

Nigeria’s debt to IsDB is about $241.84 million, while its debt to the International Fund for Agricultural Development is $273.51 million.

Nigeria’s debt to China and other countries

Bilateral lenders like China and France have given Nigeria $5.89 billion in credit financing.

According to reports, China remains Nigeria’s largest bilateral lender, with $5.07 billion owed to the Exim Bank of China.

Nigeria is indebted to France about $623.55 million and $52.18 million to Japan.

Nigeria’s indebtedness to India stands at $22 million and Germany $115.81 million.

Meanwhile, commercial creditors via Eurobonds form much of Nigeria’s external debt.

The country owes about $15.12 billion in Eurobonds, which accounts for 35.24% of Nigeria’s foreign debt.

Sovereign debt servicing dips from 97% to 65% in Nigeria

Legit.ng earlier reported that in response to the recent decline in sovereign debt servicing from 97% to 65% of government revenue, President Bola Tinubu said the change indicated the country's economic recovery.

During Monday's swearing-in ceremony for seven new ministers in Abuja, Tinubu declared war on looters and promised to take innovative measures to protect the country's wealth from theft.

He also emphasised these leaders' vital role in helping Nigeria navigate its economic difficulties, highlighting the significance of their commitment and foresight during this crucial time.

RepoMan007:
Mostly for paying ghosts workers, building airports, highways and flyovers, or outright looting.

CooldipoMPS:
Debt to fund a production economy make sense but is that what 9ja is doing? i strongly doubt

CooldipoMPS:
Debt to fund a production economy make sense

CooldipoMPS:
Debt to fund a production economy make sense

Seefinish:
More loans to be applied by Tinubu and Akpabio will approve them with the speed of light

trutharena:
The increase in debt is solely due to the naira devaluation.

Olarewaju89:
Where is the subsidy fund

Let them use the subsidy money to pay simple. Theif