Commercial loans gulped the largest chunk of the $357.26 million the Federal Government spent on external debt servicing in the first three months of the year (2019). This is according to statistics obtained from the Debt Management Office (DMO).
Breakdown: According to the data, a total of $210.76 million was spent on commercial loans. This represents 58.99% of the external debt servicing spending. The commercial loans include Eurobonds whose maturity dates range from 2018 to 2038.
More so, multilateral loans consumed a total of $79.4 million, representing 22.22%. The multilateral loans include funds dispensed by the two arms of the World Bank – International Bank of Reconstruction and Development (IBRD), and the International Development Association (IDA), as well as the African Development Bank (ADB), and the Islamic Development Bank (IDB).
Similarly, a total of $67.1 million, representing 18.78% was spent on bilateral loans. The bilateral loans included funding from the Export-Import Bank of China (Chexim) that funded the Nigerian Communications Satellite (NIGCOMSAT) project and the Nigeria National Public Security Communications Systems (NPSCS) project.
Why this matters: Nigeria’s accrued debt stock rose to N24.9 trillion (US$81.2 billion) at the end of March 2019. According to the latest report by the DMO, Nigeria’s total debt portfolio hits N24.9 trillion in the same period, compared to N24.3 trillion in December 2018. That is, quarter on quarter, Nigeria’s total debt stock rose by 2.3% or N560 billion.
- the African Development Bank (AfBD) recently revealed that Nigeria spends more than 50% of its revenue on debt servicing;
- the World Bank has claimed Nigeria’s debt is not sustainable; and
- the former Central Bank of Nigeria’s Governor, Sanusi Lamido, recently declared that Nigeria is “bankrupt and the country is heading to bankruptcy”.