There are indications of a looming debt crisis as Nigeria’s external debt could reach $45.1 billion by the end of 2024, with the Federal Government seeking to secure more external funding.
According to a report from the Debt Management Office (DMO), the country’s external debt grew by $780 million in the second quarter of 2024, rising from $42.12 billion in March to $42.9 billion by June 2024.
On Thursday, the Federal Executive Council (FEC) approved a $2.2 billion external borrowing plan as part of the financing strategy for the Federal Government’s 2024 Appropriation Act.
During a briefing after the FEC meeting, Finance Minister Wale Edun discussed the new borrowing plan, which includes Eurobond and Sukuk offerings worth $1.7 billion and $500 million, respectively.
He also highlighted that Nigeria’s ability to access the international capital market reflects global approval and backing for President Bola Ahmed Tinubu’s economic reforms.
With the addition of the $2.2 billion borrowing plan, the country’s external debt is expected to reach $45.1 billion by the end of 2024.
The borrowing plans come at a time when Nigeria has already spent $3.58 billion servicing its foreign debt in the first nine months of 2024, marking a 39.77% increase from the $2.56 billion spent during the same period in 2023, according to data from the Central Bank of Nigeria.
In October 2024, the DMO reported that Nigeria’s total debt stock had risen to N134.3 trillion by the end of June 2024.
In response to the growing debt, Muda Yusuf, the Director of the Centre for the Promotion of Private Enterprise (CPPE), criticized the rising debt burden, highlighting the country’s limited revenue capacity and persistent infrastructure gaps as major concerns.
