Data from the Central Bank of Nigeria has shown that between January and May this year, the country spent N2.2 billion on debt servicing.
According to the CBN International Payments Data, the federal government spent the highest on debt financing in May at $854.36 million, the highest paid in a single month in the past year.
The figure is about 297 per cent higher than what was spent on debt servicing in April and 286.49 per cent higher than the $221.05 million the country spent in May 2023.
Debt servicing gulped $215.20 million in April, $276.16 million in March, $283.22 million in February and $560.52 million in January.
The entire amount is about 96.32 per cent higher than what the federal government spent on debt servicing within the same period in 2023 which stood at $1.12 billion.
This amount spent is nearly half of the $4.8 billion projected for the entire year by Fitch Ratings in a report that predicted that Nigeria’s external debt servicing would rise by $400 million to $5.2 billion next year.
The CBN data also indicated that Letters of Credit declined significantly in the first five months of the year compared to the same period in 2023.
Letters of credit, which is a mode of payment used for the importation of goods dropped by 63.26 per cent to $279 million from $762.03 million in the first five months of 2023.
Meanwhile, the CBN International Payments Data showed that total direct remittances hit $841 million in five months, about 28.55 per cent higher than $654.51 million in the same period in 2023.
