Nigeria's External Debt Set to Skyrocket to $45.1 Billion by 2024

The country's external debt is projected to escalate to $45.1 billion by the end of the year, raising concerns about a looming debt crisis.

This development follows a report from the Debt Management Office (DMO), which highlighted an increase in the external debt stock by $780 million in the second quarter of 2024, growing from $42.12 billion in March to $42.9 billion by June.

In a bid to address fiscal needs, the Federal Executive Council (FEC) recently approved a $2.2 billion external borrowing plan as part of the 2024 Appropriation Act financing programme.

This plan includes Eurobond and Sukuk offerings valued at $1.7 billion and $500 million, respectively. Minister of Finance Wale Edun remarked that this borrowing strategy reflects "acceptance and support for President Bola Ahmed Tinubu’s economic reforms." However, these borrowing plans come at a time when Nigeria's debt servicing costs are rising sharply.

The country spent $3.58 billion on servicing its foreign debt in the first nine months of 2024, a 39.77 percent increase from the $2.56 billion spent during the same period in 2023, according to data from the Central Bank of Nigeria. Critics, such as Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), have voiced concerns over the increasing debt burden.

Yusuf pointed out the "insufficient revenue capacity and ongoing infrastructural deficits" as major issues exacerbating the situation.