Available data from Central Bank of Nigeria (CBN) showed that Nigeria spent $1.31 billion to service external debt obligations between January and November last year.
According to CBN, the external debt service payment stood at $1.31 billion at the end of November last year, compared to $1.47 billion spent in the corresponding period of 2018. Nigeria’s external debt profile continues to snowball and its attendant cost is worrisome.
Specifically, the country’s total debt stock constitutes both external and domestic debts. As at June last year, the country’s total external stood at N8.32 trillion. Nigeria’s total public debt stock stood at N25.7 trillion.
This means external debt service payment alone rose by 245.9per cent between 2015 and 2019 while an accumulated $3.95 billion was paid between the periods.
Experts continue to stress that while the country’s debt to gross domestic product (GDP) ratio is sustainable for now, the cost of servicing the debt eats deep into the country’s already depleting revenue.
Critics of the government have complained about the government’s penchant for debts, believing that it could put the future of younger Nigerians in jeopardy.
International Monetary Fund (IMF) passed a vote of no confidence on the most populous black nation. The IMF stated that though Nigeria’s debt to gross domestic product ratio has increased to 28 per cent, as it remains lower than the average ratio recorded in sub-Saharan Africa.
According to the IMF, only African countries like Kenya, Zambia and others are in a position where they can’t afford to pay back their debts.
As contained in the budget, the Federal Government budgeted N2.45 trillion to service debt this year. This is just slightly below N2.78 trillion budgeted for the total capital expenditure.
It should be noted that in the 2020 budget, the overall budget deficit is N2.175 trillion. This means the 2020 budget deficit is largely due to debt service payment as it gulps 23.1per cent of Nigeria’s budget.