The Federal Government of Nigeria allocated $2.78 billion to debt servicing between January and July 2024, according to data released by the Central Bank of Nigeria (CBN).
The figures were part of the CBN’s recent ‘International Payments Data’ report, which also revealed that the country recorded $1.18 billion in direct remittances during the same period.
The report detailed significant fluctuations in monthly debt servicing costs throughout the first seven months of 2024.
In January, the government began the year with $560.52 million in debt payments, setting a high starting point. However, February saw a marked decrease in spending, with $283.22 million allocated, a 49.5% reduction from the previous month.
March continued the downward trend, with $276.17 million spent on debt servicing, representing a 2.5% decline compared to February. In April, the expenditure dropped to $215.20 million, a 22.1% reduction from March’s figures.
May, however, witnessed a sharp reversal in this trend, with debt servicing costs surging to $854.37 million—the highest recorded during the period. This represented a 297% increase from April’s spending.
The spike was followed by a dramatic drop in June, where only $50.82 million was spent on debt servicing, marking a staggering 94% decrease from May’s outlay and the lowest amount in the seven months.
The trend shifted again in July, with the government allocating $542.50 million to debt servicing, a substantial 967% increase from June’s low.
The CBN’s report also highlighted the fluctuations in Nigeria’s remittance inflows during the first seven months of 2024.
In January, the country received $138.56 million in direct remittances. However, February saw a significant drop to $39.15 million, a 71.7% decline from January’s figure.
March saw a recovery, with remittances increasing to $104.91 million, marking a 168% rise from February. The upward trend continued in April, with inflows of $193.31 million, an 84.3% increase from March.
May recorded the highest remittance inflows during this period, with $365.44 million, an 89% surge from April.
This peak in remittances may have been driven by improved global economic conditions or favourable exchange rates.
However, the trend reversed in June, with remittances falling to $270.52 million, a 26% decrease from May.
July continued the decline, with remittance inflows dropping further to $72.29 million, a 73.3% fall from June’s figure.
Meanwhile, following a significant increase in the CBN’s Standing Lending Facility (SLF) rate to 31.75 per cent, banks borrowing from the apex bank plummeted by 76.4 per cent in August 2024, totalling N4.04 trillion compared to N17.12 trillion reported in July 2024.
The sharp decline marks the third-lowest borrowing figure for the year, as Nigerian banks adopt a more cautious approach amidst rising interest rates.
The CBN’s decision to raise the SLF rate comes in the wake of a broader monetary policy adjustment.
