Nigeria’s Debt Spiral: External Borrowing Soars Toward $45.1 Billion Amid Mounting Repayment Costs

|By Adejumo Adekunle-

Nigeria faces a growing debt challenge as external borrowing is projected to hit $45.1 billion by the end of 2024, fueled by the Federal Government’s new $2.2 billion loan approval. The Debt Management Office (DMO) reported a $780 million increase in external debt during Q2 2024, rising from $42.12 billion in March to $42.9 billion in June.

The Federal Executive Council (FEC) recently greenlit the borrowing plan, which includes $1.7 billion in Eurobonds and $500 million in Sukuk offerings. Finance Minister Wale Edun highlighted the move as evidence of international confidence in President Bola Ahmed Tinubu’s economic reforms.

However, this borrowing spree comes at a steep cost. Nigeria spent $3.58 billion servicing foreign debt in the first nine months of 2024, a 39.77% jump from $2.56 billion during the same period in 2023, according to Central Bank data. Meanwhile, the country’s total debt stock surged to N134.3 trillion as of June 2024, sparking criticism from experts.

Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), condemned the rising debt, warning of strained revenue streams and unmet infrastructural needs. As Nigeria ramps up borrowing, concerns over long-term fiscal sustainability intensify.