Nigeria spends $112 million monthly servicing external debt, says CBN report

According to research by Eyewitness9ja, the Federal Government spent $112.35 million in January 2023 repaying external debt.

According to information from the Weekly International Payments report published by the Central Bank of Nigeria, the amount spent in January was $146.17 million, more than the $45.64 million spent in December 2022.

This happened when the Federal Government worked to increase its income base despite obstacles.

The Federation Account Allocation Committee distributed N750.17 billion to the three levels of government in January 2023, according to a previous report by Eyewitness9ja.

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The amount is down N240.02 billion from the N990.19 billion given in December 2022.

Nigeria paid $2.4 billion in 2022 to service its external debt, a little increase over the $2.11 billion spent in 2021.

According to Eyewitness9ja, the federal government took over N78 billion from the allocations given to the states to pay their foreign debt.

This was based on information from the National Bureau of Statistics’s publication of the Federation Account Allocation Committee Disbursement Reports.

The deductions were made from the Federation Account allocations allocated to state governments in 2022.

The legislative structure that governs the federation account now permits money to be distributed among three key categories: statutory allocation, Value Added Tax distribution, and derivation principle.

Eyewitness9ja said that Lagos was the state worst impacted by the deductions, with around N23.61 billion set aside in 2022 for external debt payment.

Following it were Kaduna, which had N10.25 billion removed, and Cross River, which had N7.56 billion deducted.

According to the latest data from the International Monetary Fund, the Federal Government expects to spend 82% of its revenue on interest payments in 2023.

The IMF projects that foreign debt, including private sector debt, would increase to $121.6 billion, while external reserves will increase to $37.5 billion.

This was stated in the document “IMF Executive Board Concludes 2022 Article IV Consultation with Nigeria Summary,” which included a table of forecasts.

According to the forecasts, less money would be utilized by the government to pay interest, dropping from 96.3% in 2022 to 82.3% in 2023.

In addition, it said that in 2020 and 2021, respectively, interest payments were 86.1% and 87.8% of the federal government’s revenue.