Nigeria’s external debt is expected to rise to $45.1 billion by the end of 2024, raising concerns of a potential debt crisis as the Federal Government plans more borrowing.
A recent report from the Debt Management Office (DMO) revealed that the country’s external debt increased by $780 million in the second quarter of 2024, growing from $42.12 billion in March to $42.9 billion by June.
Last week, the Federal Executive Council (FEC) approved a new $2.2 billion external borrowing plan to fund the 2024 Appropriation Act. This plan includes $1.7 billion from Eurobond offerings and $500 million through Sukuk financing, as confirmed by the Minister of Finance, Wale Edun.
Edun noted that Nigeria’s ability to secure international loans reflects the global confidence in President Bola Ahmed Tinubu’s economic reforms. However, the rising debt comes at a cost. The Central Bank of Nigeria reported that the country spent $3.58 billion servicing foreign debt between January and September 2024, a significant 39.77% increase compared to $2.56 billion during the same period in 2023.
In October 2024, the DMO also reported that Nigeria’s total debt stock had reached N134.3 trillion by the end of June.
Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), expressed concern over the increasing debt burden. He highlighted the country’s weak revenue generation and persistent infrastructural challenges as critical issues that could undermine economic stability.
