Nigeria’s rising debt profile has continued to gulp more revenue despite efforts to rein in leakages and up revenue generation.
In the first half of 2021, the Federal Government spent a combined sum of N1.47 billion on debt servicing, according to the latest report from the Debt Management Office (DMO).
A breakdown of the report shows Nigeria spent N612.7 billion on domestic debt servicing between January and March 2021, while $1 billion or N410.33 billion was spent on external debt servicing.
In the second quarter, April to June 2021, the Federal Government doled out N322.7 billion on domestic debt servicing and $299 million or N122.7 billion on external debt servicing. $1 to N410.33 exchange rate was used for external debt servicing computation.
A further analysis revealed that for domestic debt, the country spent N219 billion in January, N125.09 billion in February, N270.33 billion in March, N258 billion in April, N42.4 billion in May, and N22.3 billion in June.
In the first quarter (Q1), the government focused on principal repayments, while in the second quarter (Q2), the government focused on interest payments.
In Q2, the report noted that Nigeria spent N322.7 billion on payment of interest, with N50.3 billion expanded on the redemption of matured Nigeria Treasury Bills.
For external debt servicing in Q2, commercial loans had 53 per cent with a cost of $157 million or N64.4 billion, multilateral had 35 per cent with a cost of $103.7 million or N42.5 billion, and bilateral had 13 per cent with a cost of $38.2 million or N15.7 billion.
For external debt servicing in Q1, commercial loans had 76 per cent with a cost of $763.04 million or N313.10 billion, multilateral had 13 per cent with a cost of $134.04 million or N55 billion, and bilateral had 11 per cent with a cost of $106.33 million or N43.63 billion.