How Nigeria’s Debt Service rose to N5.24trn in two years

By Tolulope Oke

Data from the Debt Management Office (DMO) website show that in 30 months (2 years and 5 months), Nigeria’s domestic debt service increased to N5.24 trillion.

According to DMO’s most recent report, domestic debt service in the first quarter of 2022 was N664.73 billion, a 0.6% decrease from N668.69 billion in the second quarter.

This implies that the federal government has serviced domestic debt with N1.33triillion in first half of 2022, a 43 per cent Year-on-Year (YoY) increase from N935.46billion reported in first half of 2021.

Further breakdown revealed that the government domestic debt service was at N2.05trillion in 2021, a 10.8 per cent increase from N1.85trilllion in 2020.

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Following massive budget deficit, the federal government of recent has borrowed aggressively through treasury Bills, Bonds, Savings Bonds and Sukuk to support infrastructure development across the country.

Experts have raised concerns as the federal government continues to obtain new loans from both local and external sources, despite growing debt profile and servicing cost.

The International Monetary Fund (IMF) had predicted that Nigeria’s debt service-to-revenue ratio would jump to 92 per cent in 2022 from 76 per cent in 2021.