The Nigerian government has reiterated its commitment to meeting its debt obligations, both domestic and foreignThe DMO assured that the country has made sufficient provisions in the 2025 Appropriation BillNigeria is indebted to several countries and organizations, including China, France, the World Bank, and the IMF
The Debt Management Office (DMO) has assured Nigerians that the federal government will fulfill its domestic and foreign debt obligations in 2025.
The debt office said that there is sufficient budgetary provisions in the N47.9 trillion 2025 Appropriation Bill to cover debt owed but locally and foreign.
Nigerian government assured of meeting up to its debt obligation
Photo credit: presidency
Source: UGC
The reassurance follows concerns over Nigeria’s rising debt servicing commitments, with N15.81 trillion earmarked for this purpose in the proposed budget, Punch reports.
Nigeria 2025 budget
President Bola Tinubu had presented the budget to the National Assembly last month, projecting revenue of N34.82 trillion and a deficit of N13.0 trillion, which would be financed through fresh borrowing.
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The budget is under scrutiny by appropriation committees in both chambers of the legislature, with their reports expected later this month(January 2025).
Once finalised, the bill will be passed and signed into law by Mr. Tinubu.
DMO assures Nigerians
In a statement issued on Wednesday, January 1, the DMO dismissed fears of a potential default, stressing that Nigeria’s debt management aligns with legal provisions and international standards.
The agency pointed out that Nigeria successfully issued $2.2 billion Eurobond issued in November which attracted over $9 billion in subscriptions from a diverse pool of investors across the UK, North America, Europe, Asia, the Middle East, and Nigeria.
DMO said:
“This overwhelming response reflects continued investor confidence in Nigeria’s macroeconomic policies and prudent fiscal and monetary management.”
The agency also noted that the Eurobond issuance opened opportunities for Nigerian banks and corporate entities in the international capital markets.
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Additionally, it pointed to the growing interest in FGN bonds, Sukuk bonds, and other securities as evidence of Nigeria’s commitment to best practices in debt management.
Nigeria’s foreign debt repayment in 2024
Data from DMO shows that In the first quarter, (January to March), the Nigerian government spent $1.12 billion to service debts owed to various foreign entities.
While April to June, another $1.12 billion of revenue was used to repay debts owed to countries and institutions such as the World Bank and the International Monetary Fund (IMF).
Henzodaily.ng observed that interest and service fees are major reasons for Nigeria’s high debt servicing.
For example, in the first quarter, the total interest payment and service fee costs were $228.67 million and $53.87mil, respectively, while the second quarter’s interest payment increased to $403.68 million and the service fee stood at $25.968 million.
10 African countries with the least debt burden in 2024
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Henzodaily.ng ealier reported that Nigeria is ranked among one of the 10 African countries with the least external debt burden.
Other countries on the list are Equatorial Guinea, Namibia, Democratic Republic of Congo and Zimbabwe, among others.
African countries with low debt burden are better positioned to attract investment and more facilities from foreign and domestic debtors.
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Source: Henzodaily.ng