The naira devaluation has increased Nigeria’s external debt by about N30.03 trillion between 2023 and June 2024, which is considered in naira terms.
Data from the Debt Management Office (DMO) shows that as of June 1, last year, Nigeria’s external debt was $43.16 billion
Due to the naira crash, Nigeria’s external debt, which was reduced to $42.90 billion, now equals N63.07 trillion in naira terms. …CONTINUE READING
The naira devaluation has increased Nigeria’s external debt by about N30.03 trillion between 2023 and June 2024, which is considered in naira terms.
When calculated using the current exchange rate, Nigeria’s debt in dollars has made the country’s foreign debts more expensive in the local currency.
Data from the Debt Management Office (DMO) shows that as of June 1, last year, Nigeria’s external debt was $43.16 billion.
The exchange rate of N770.30 to a dollar amounted to N33.25 trillion. However, by June 1, 2024, the naira depreciated by over 47%, with the FX rate hitting N1,470.19 per dollar. Due to the naira crash, Nigeria’s external debt, which was reduced to $42.90 billion, now equals N63.07 trillion in naira terms.
Nigeria’s external debt declined by 0.60% in dollars or $258.18 million between June 2023 and the same month in 2024. In naira terms, there was a spike of over 89% or N29.82 trillion in the same period
Findings reveal that if the June 2023 exchange rate were used, Nigeria’s external debt would have been N33.05 trillion.
The development further shows that the naira devaluation added N30.02 trillion to the country’s external debt in one year as Nigeria battles weak currency and rising debt.
While the nominal value of Nigeria’s foreign debt in dollars has been stable, the naira depreciation has raised the naira equivalent.
Also, multilateral lenders remain Nigeria’s largest creditors, amounting to half of the country’s debt as of June 2024.
The creditors include the International Monetary Fund (IMF), the World Bank Group, the African Development Bank Group (AfDB), the Islamic Development Bank (IDB) and others. Punch reports that Nigeria owes the IMF about $1.61 billion, representing 3.75% of the total external debt.
Nigeria is indebted to the World Bank Group for $16.32 billion, with the majority owed to the International Development Association (IDA), accounting for $16.32 billion, 38% of Nigeria’s total foreign debt.
The Nigerian government owes $484 million to another arm of the World Bank, the International Bank for Reconstruction and Development. Nigeria’s debt to AfDB is $3.87 billion, representing 9.03% of the total external debt.
Bilateral lenders like China and France have given Nigeria $5.89 billion in credit financing.
According to reports, China remains Nigeria’s largest bilateral lender, with $5.07 billion owed to the Exim Bank of China. Nigeria is indebted to France about $623.55 million and $52.18 million to Japan
