Amid worries about Nigeria’s increasing debt burden, the country’s debt servicing cost has risen by 55.71 per cent to N1.24 trillion in the First quarter of 2023.
This was learnt from Debt Management Office’s recent debt service data.
It stated that from January to March 2023, Nigeria spent N874.13bn on domestic debt servicing, while it spent $801.36m (N368.87bn) on external debt servicing, totalling N1.24 trillion.
The exchange rate of the DMO, which was $1/N460.3, was used for external debt servicing.
In contrast, 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.
In DMO’s 2022 Sustainability Report, the Office lamented that the Federal Government debt service to revenue ratio of 73.5 per cent for 2023 exceeded the recommended threshold of 50 per cent.
Meanwhile, the International Monetary Fund, IMF, has said Nigeria is projected to spend 82 per cent of its revenue on debt servicing.
Financial experts, Idakolo Gbolade and Muda Yusuf said Nigeria’s debt service to revenue ratio is unsustainable.