The naira devaluation has increased Nigeriaâs external debt by about N30.03 trillion between 2023 and June 2024, which is considered in naira terms.
When calculated using the current exchange rate, Nigeriaâs debt in dollars has made the countryâs foreign debts more expensive in the local currency.
Data from the Debt Management Office (DMO) shows that as of June 1, last year, Nigeriaâs external debt was $43.16 billion.
The exchange rate of N770.30 to a dollar amounted to N33.25 trillion.
However, by June 1, 2024, the naira depreciated by over 47%, with the FX rate hitting N1,470.19 per dollar.
Due to the naira crash, Nigeriaâs external debt, which was reduced to $42.90 billion, now equals N63.07 trillion in naira terms.
Nigeriaâs external debt declined by 0.60% in dollars or $258.18 million between June 2023 and the same month in 2024.
In naira terms, there was a spike of over 89% or N29.82 trillion in the same period.
Findings reveal that if the June 2023 exchange rate were used, Nigeriaâs external debt would have been N33.05 trillion.
The development further shows that the naira devaluation added N30.02 trillion to the countryâs external debt in one year as Nigeria battles weak currency and rising debt.
While the nominal value of Nigeriaâs foreign debt in dollars has been stable, the naira depreciation has raised the naira equivalent.
Further findings showed that external debt accounted for 46.96% of Nigeriaâs external debt as of June 2024, from 38.05% reported in the same period in 2023.
Also, multilateral lenders remain Nigeriaâs largest creditors, amounting to half of the countryâs debt as of June 2024.
The creditors include the International Monetary Fund (IMF), the World Bank Group, the African Development Bank Group (AfDB), the Islamic Development Bank (IDB) and others.
Punch reports that Nigeria owes the IMF about $1.61 billion, representing 3.75% of the total external debt.
Nigeria is indebted to the World Bank Group for $16.32 billion, with the majority owed to the International Development Association (IDA), accounting for $16.32 billion, 38% of Nigeriaâs total foreign debt.
The Nigerian government owes $484 million to another arm of the World Bank, the International Bank for Reconstruction and Development.
Nigeriaâs debt to AfDB is $3.87 billion, representing 9.03% of the total external debt.
Nigeria is indebted to the Arab Bank for Economic Development in Africa about $4.97 million, representing 0.01% of the countryâs external debt.
