Nigeria’s Debt Servicing Expense Doubles to N7.8 tn in 2023– Report
Nigeria invested an amount of N7.8 trillion to service its financial obligation responsibilities in 2023, a 121% boost compared to N3.52 trillion sustained in the previous year.
This is according to analysis of information launched by the Debt Management Office (DMO).
The breakdown of the information reveals that domestic financial obligation service expense stood at N5.23 trillion, representing a 104% boost from the previous year’s N2.56 trillion, while external financial obligation service rose by 167% to N2.57 trillion, compared to N962.5 billion tape-recorded in 2022.
The considerable dive in Nigeria’s financial obligation service expense was partially due to the decline of the regional currency, which drove the expense of servicing foreign financial obligation commitments as the CBN faced FX liquidity crisis and currency exchange rate volatility.
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The dominating currency exchange rate for the quarterly durations as supplied by the DMO were utilized to transform the external financial obligation expense from dollar to naira.
It deserves keeping in mind, that the financial obligation service expense in the evaluation year, exceeded the N6.56 trillion that was allocated for the year. According to the budget plan file acquired from the Budget Office, the federal government had actually allocated N6.56 trillion for financial obligation maintenance, which is comprised of N3.29 trillion (domestic), N1.81 trillion (external), N247.7 billion (sinking fund), and N1.2 trillion as interest on Ways & & Means financial obligation to the CBN.
Nigeria continues to come to grips with decreasing income in the middle of increasing financial expense, with financial obligation maintenance gulping a big portion of federal government spending plan. According to information from the Budget Office, financial obligation maintenance represented 45.6% of its overall expense in between January and September 2023.
Compared to income created in the very same duration, financial obligation service gulped about 80.9% of the overall federal government earnings in the 9 months duration. Especially, kept profits stood at N7.51 trillion while financial obligation service since September 2023 was N5.79 trillion.