DMO: Debt servicing hit ₦3.57trn in Q3 2024
Nigeria’s total debt service costs, covering both external and domestic obligations, surged in the third quarter of 2024, reflecting the impact of increased external debt payments and a depreciating naira.
The Debt Management Office (DMO) reported that total debt service costs for Q3 2024 reached ₦3.57tn, a quarter-on-quarter increase of ₦60bn or 1.71% from ₦3.51tn recorded in Q2.
External debt service payments in Q3 amounted to $1.34bn, equivalent to ₦2.14tn when converted at the September exchange rate of ₦1,601.03/$. This represents a 29.70% increase in naira terms compared to Q2’s external debt service of $1.12bn, valued at ₦1.65tn using the June exchange rate of ₦1,470.19/$. The hike was attributed to the naira’s depreciation and higher dollar-denominated obligations.
In dollar terms, external debt service payments rose by 19.44%, from $1.12bn in Q2 to $1.34bn in Q3. This increase stemmed from higher payments to multilateral and bilateral creditors, as well as significant interest payments on commercial loans.
Multilateral debt service payments remained the largest component, totaling $712.66m (₦1.14tn) in Q3, up by 6.04% from $672.01m (₦988.64bn) in Q2. These payments accounted for 53.26% of total external debt service, driven by increases in principal repayments and interest charges. Payments to the International Monetary Fund (IMF) rose slightly to $406.98m (₦651.56bn) from $404.24m (₦594.59bn) in Q2.
Bilateral debt service payments saw a dramatic quarter-on-quarter rise of 325.52%, climbing to $186.92m (₦299.22bn) in Q3 from $43.92m (₦64.62bn) in Q2. This spike was largely due to payments to China’s Exim Bank, which surged to $182.04m (₦291.47bn) in Q3 from zero in Q2.
The rising debt service burden underscores the challenges posed by Nigeria’s growing external obligations and the impact of currency depreciation on the economy.
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