Nigeria Spent N609.13bn In Three Months To Pay Domestic Debt

Nigeria spent N609.13 billion in three months to service domestic debt, AllNews can confirm. The Federal Government spent the amount between January and March 2020, with the country expected to spend all generated revenue this year on debt interest payments.

It was learnt that the N609.13 billion was spent on treasury bills, FGN bonds, saving bonds and Sukuk bonds. According to Debt Management Office (DMO), N111.60 billion was paid as interest paid on treasury bills, N488.9 billion on FGN bonds, and N392.794 billion on FGN savings bonds.

Further breakdown of the debt service payment showed that for the month of January, N251.35 billion was spent, in February, N158.12 billion was spent, while N199.658 billion was spent in March this year. All these spendings occurred in the first quarter of 2020, a period Nigeria retained N950.56 billion as revenue but spent N943.12 billion on debt servicing

Note that Nigeria's debt service to revenue ratio for Q1 2020 was 99 percent according to the ministry of finance, budget, and national planning. This means for every N1 Nigeria earn, the government will use 99 kobo to pay debt - that's why the International Monetary Fund (IMF) stated that Nigeria will use almost all its revenue to service debt.

Nigeria Debt Problem Killing Revenue

Despite the huge debt of Nigeria, the government keeps obtaining more loans. The Government under President Muhammadu Buhari continues to pile up Nigeria's debt burden obtaining $750 million loan from the World Bank after the African Development Bank (AfDB) gave Nigeria a loan of €288.5 million.

Nigeria also received $3.4 billion financing assistance from the IMF - all these loans were received this year. Before the $750 million loan was approved by the World Bank, Nigeria had a debt of $10.1 billion owed to the World Bank. Nigeria has a debt of $3.2 billion owed to Beijing-based Export-Import Bank of China, while Eurobonds account for a total $10.86 billion owed by Nigeria - Nigeria’s total public debt is $79.3 billion as at March 31, 2020.