The naira devaluation by President Bola Ahmed Tinubu has shot up Nigeria’s external debt by some additional N30.03 trillion between 2023 and June 2024.
In line with the current exchange rate, Nigeria’s debt in dollars made the country’s foreign debts more expensive in the local currency.
Data from the Debt Management Office (DMO) indicates that by 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 percent, 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 percent in dollars, or $258.18 million, between June 2023 and same month in 2024.
In naira terms, there was a spike of over 89 percent 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 percent of Nigeria’s external debt as of June 2024, from 38.05 percent reported in the same period in 2023.
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.
Nigeria owes the IMF about $1.61 billion, representing 3.75 percent 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 percent 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 percent of the total external debt.
Nigeria is indebted to the Arab Bank for Economic Development in Africa about $4.97 million, representing 0.01 percent 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.
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 percent of Nigeria’s foreign debt.
Sovereign debt servicing dips from 97 percent to 65 percent in Nigeria
Legit.ng earlier reported that in response to the recent decline in sovereign debt servicing from 97 percent to 65 percent of government revenue, President Bola Tinubu said the change indicated the country’s economic recovery.
