Nigeria’s debt servicing cost has increased by 55.71 per cent to N1.24tn in three months According to data obtained from the Debt Management Office, between October and December 2022, Nigeria spent N406.77bn on domestic debt servicing, while it spent $312.27m (N143.74bn) on external debt servicing, giving a total of N550.51bn.

However, between January and March 2023, Nigeria spent N874.13bn on domestic debt servicing, while it spent $801.36m (N368.87bn) on external debt servicing, giving a total of N1.24tn.

The exchange rate of the DMO, which was $1=N460.3, was used for the external debt servicing. The International Monetary Fund recently said the Federal Government projected to spend 82 per cent of its revenue on interest payments in 2023.

According to the IMF, external debt (including that of the private sector) will rise to $121.6bn, with external reserves climbing to $37.5bn. It disclosed this in a table of projections in its ‘IMF Executive Board Concludes 2022 Article IV Consultation with Nigeria Summary.

The projections showed an improvement in the share of the government’s revenue used as interest payment, with interest payment falling from 96.3 per cent in 2022 to 82 per cent in 2023.