The Federal Government spent $2.12 billion to service the country’s external debt in 2021, representing a 37 percent increase from $1.56 billion spent in 2020.
Data from the Central Bank of Nigeria, (CBN), however, shows a 58% decline in debt service payment in the second half of the year (H2’21), to $824.41 million, from $1.3 billion in the first half of the year (H1’21).
However, the $824.41m external debt service payment in H2’21 represents a 3.4%, year-on-year, (YoY) increase from $797.48 million spent in the corresponding period of 2020 (H2’2020).
Similarly, the $1.3 billion spent on external debt service in H1’21 represents a 72%, YoY increase, from $755.38m spent in H1’2020.
Further analysis shows that the highest external debt service payment was recorded in the first quarter of the year (Q1’21), when debt service payment rose YoY by 114% to $1.003 bn, from $468.34 million in Q1’2020.
The growth in external debt service payment slowed down the second quarter (Q2’21) to $298.97 million, representing a 3.8% YoY increase from $287.04 million in Q2’2020.
In the third quarter (Q3’21), external debt service payment rose to $520.78 million, representing a 2.6% increase from $508.03 million in Q3’2020.
In the fourth quarter (Q4’21), the amount spent on external debt service payment recorded another YoY increase of 5.2% to $303.64 million from $289.45 million in Q4’2020.
The sharp increase in external debt service payment in 2021 was driven by the 18.6k YoY increase in the nation’s external debt in the first three quarters of 2021.
Data from the Debt Management Office, (DMO), showed that total external debt stood at $37.95 billion at the end of Q3’21, representing 18.6%, from $31.99 billion at the end of Q3’2020.
