Nigeriaâs debt service costs, external and domestic, increased in Q3 2024, showing the combined effect of increased external debt service payments and currency devaluation.
During the review period, the total debt service cost reached an estimated N3.57 trillion, an increase of N60 billion or 1.71% from N3.51 trillion in the second quarter.
According to figures from the Debt Management Office (DMO), external debt service payments in the review quarter amounted to $1.34 billion, translating to N2.14 trillion at the exchange rate of N1,601.03 per dollar.
The second quarterâs external debt service of $1.12 billion was valued at N1.65 trillion on the June FX rate of N1,470.19 per dollar.
The value represents a 29.70% spike in naira terms due to naira decline and higher dollar debt.
The DMO provided the exchange rate for the debt service in its report.
In dollar rate, the Nigerian government spent $1.34 billion on external debt repayment between July and September last year, representing a 19.44% spike from the $1.11 billion recorded in the previous quarter.
The increase in payments was due to higher multilateral and bilateral lenders, including interest payments on commercial loans.
The DMO data showed that multilateral debt service payments were the most significant component at $712 million in the third quarter, representing a 6.04% spike from $672.01 million in the second quarter.
The development was 53.26% of external debt payments caused by increases in principal repayments and interest rate charges.
According to Punch, the International Monetary Fund (IMF) payments increased slightly to $406.98 million from $404.24 million in the previous quarter.
The DMO disclosed that bilateral service payments saw a significant quarterly increase of 325.52% of $186.92 million from $43.92 million in the second quarter.
The increase was due to payments to Chinaâs Exim Bank, which increased to $182.04 million in the third quarter from zero in Q2.
Other lenders include the Exim Bank of India and the French Development Agency (FDA), which recorded payment increases.
Commercial debt services include Eurobonds and other syndicated loans, totalling $438.68 million in the third quarter, representing an 8.48% increase from $404.46 in the second quarter.
Eurobond’s interest payment was $427.72 million, maintaining its dominant share of commercial debt service costs.
DMO revealed that domestic debt service for the third quarter was N1.43 trillion from N1.86 trillion in the previous quarter.
Nigeriaâs bond interest payments skyrocketed to N1.25 trillion in Q3, representing a quarterly decrease from N1.68 trillion in the previous quarter.
Eurobond interest payments accounted for $427.72m, maintaining their dominant share of commercial debt service costs.
