FG services debts with N1.24tr between January and March 2023
By Patience Ikpeme
In the first quarter of 2023, the Federal Government of Nigeria spent N1.24 trillion on debt servicing, according to the Debt Management Office (DMO).
This consisted of N874.13 billion for domestic debt and N368.87 billion ($801.36 million) for external debt.
Comparatively, in the last quarter of 2022, Nigeria spent N550.51 billion on debt servicing, representing a 55.71 percent increase.
The DMO utilized an exchange rate of $1=N460.3 to convert the external debt servicing figures to Naira.
Specific details of the domestic debt servicing obligations included N56,466,385,798.05 for interest on Nigeria Treasury Bills (NTBs), N723,957,871,169.59 for interest on FGN bonds, N8,167,315,068.49 for rentals on Sukuk, N622,808,510.21 for interest on FGN Savings Bond, and N84,915,150,796.00 for Promissory notes.
The DMO reported that maturing FGN Bonds and NTBs were refinanced, and excluded Sinking Fund Charges of N180,446,143.00 related to Treasury Bonds managed by the Central Bank of Nigeria.
For external obligations, payments were made to Multilateral bodies ($214,459,449.33), Bilateral entities ($136,474,716.28), and Commercial papers ($450,428,973.15).
The International Monetary Fund (IMF) has projected that the Federal Government would allocate 82 percent of its revenue to interest payments in 2023, while external debt, including private sector debt, is expected to reach $121.6 billion and external reserves are predicted to climb to $37.5 billion.
The IMF’s projections indicated a slight improvement in the percentage of government revenue used for interest payments, declining from 96.3 percent in 2022 to 82 percent in 2023.
The Director General of the DMO, Ms. Patience Oniha, has emphasized the importance of debt sustainability and the adverse effects of high debt levels on infrastructure investments.
