In a recent development, Nigeria’s foreign debt service has increased to $1.08 billion in the fourth quarter of 2024, according to the Debt Management Office (DMO). This significant rise from the previous quarter has raised concerns about the country’s debt profile and its ability to manage its external debt commitments.
The breakdown of the external debt payments reveals that multilateral loans account for the largest share, with $600.71 million paid in the fourth quarter. This includes $407.97 million to the International Monetary Fund (IMF), $116.48 million to the International Development Association (IDA), and $43.89 million to the African Development Bank (AfDB).
Commercial loans also play a significant role, with $430.53 million paid in the fourth quarter. This includes $148.57 million for Eurobond debt and $280.16 million for syndicated loans. Bilateral loans, on the other hand, account for a smaller share, with $46.85 million paid in the fourth quarter. This includes $33.13 million to France’s Agence Française de Développement (AFD) and $11.84 million to Germany’s KfW.
The surge in external debt service obligations has raised concerns about Nigeria’s debt sustainability, exchange rate volatility, and foreign reserve pressures. The significant payments to multilateral and commercial lenders, particularly the IMF and Eurobond holders, underscore the burden of non-concessional financing on the country’s external debt commitments.
The Debt Management Office has been working to address these concerns and ensure that Nigeria’s debt profile remains sustainable. However, the recent increase in foreign debt service highlights the need for continued vigilance and effective debt management strategies.
As Nigeria navigates its economic challenges, the country’s debt profile will remain a key area of focus. The government’s ability to manage its external debt commitments will be crucial in maintaining economic stability and promoting sustainable growth.
In conclusion, Nigeria’s foreign debt service has increased to $1.08 billion in the fourth quarter of 2024, with multilateral loans and commercial loans accounting for the largest share. The surge in external debt service obligations has raised concerns about the country’s debt sustainability, exchange rate volatility, and foreign reserve pressures. The Debt Management Office will need to continue working to address these concerns and ensure that Nigeria’s debt profile remains sustainable.
