Nigeria’s total debt servicing costs surged to an estimated N3.57 trillion in the third quarter of 2024, reflecting the twin pressures of increased external debt obligations and a depreciating naira. This marks a 1.71% rise from the N3.51 trillion recorded in the preceding quarter, according to the Debt Management Office (DMO).
Rising External Debt Servicing
External debt servicing costs stood at $1.34 billion in Q3, translating to N2.14 trillion at an exchange rate of N1,601.03/$ as of September 2024. This represents a 29.7% increase in naira terms compared to the N1.65 trillion spent in Q2, largely driven by naira depreciation and higher dollar obligations.
The bulk of external debt service payments went to multilateral creditors, totaling $712.66 million in Q3—an increase of 6.04% from $672.01 million in Q2. Payments to the International Monetary Fund rose slightly to $406.98 million. Meanwhile, bilateral debt servicing costs skyrocketed by 325.52%, driven primarily by a sharp rise in payments to China’s Exim Bank, which accounted for $182.04 million in Q3.
Commercial debt obligations, including Eurobonds, amounted to $438.68 million, with Eurobond interest payments alone reaching $427.72 million.
Domestic Debt Trends
Domestic debt servicing costs declined to N1.43 trillion in Q3 from N1.86 trillion in Q2, driven by a drop in Federal Government bond interest payments. Despite the decline, bonds accounted for 87.41% of domestic debt servicing, down from 90.32% in the previous quarter.
Interest payments on Nigerian Treasury Bills (NTBs), however, rose significantly by 56.8% to N168.53 billion in Q3, signaling increased reliance on short-term borrowing instruments
