The Central Bank of Nigeria (CBN) has reported that the nation’s external debt stock rose to ₦66.14 trillion ($43.03 billion) by the third quarter of 2024. This highlights Nigeria’s growing dependence on foreign loans to address budget deficits and fund development projects.
The current figure reflects a 0.30% increase from the $42.90 billion recorded in the previous quarter and a 3.40% rise compared to $41.59 billion in Q3 2023. Multilateral loans make up $21.77 billion of the debt, while commercial loans account for $15.12 billion. Bilateral and syndicated loans contribute $5.81 billion and $0.33 billion, respectively.
Debt servicing remains a significant challenge, with $1.34 billion spent on external debt obligations as of September 2024. Principal repayments and interest payments accounted for $0.72 billion and $0.62 billion, respectively, raising concerns about the sustainability of Nigeria’s financial commitments.
The CBN emphasized the necessity of foreign borrowing for economic growth but warned that prioritizing revenue generation and fiscal discipline is essential to ensure debt sustainability. Experts caution that rising debt servicing costs could strain the budget, affecting critical sectors like health, infrastructure, and education.
The increasing external debt underscores the urgent need for Nigeria to develop strategic policies for managing its debt while fostering sustainable economic growth.
