Nigeria has achieved a significant financial milestone by successfully repaying $1.81 billion in external debts to China, India, and Germany within the first seven months of 2023. This accomplishment underscores the government’s commitment to prudent financial management. During this period, the country witnessed a gradual increase in debt servicing, with the highest repayments occurring in June and July.
Debt Repayment Breakdown:
In January 2023, the Nigerian government allocated $112.35 million to service its foreign debt, demonstrating its responsible fiscal approach. Debt servicing increased in February to $288.5 million and further rose substantially to $400.5 million in March. April saw a prudent approach with the government spending $92.8 million on servicing external debt. May recorded $221 million spent on servicing obligations. However, June witnessed a remarkable surge, with debt servicing reaching $543 million, followed by another increase in July to $642 million, marking the highest figure in 14 months.
Diaspora Remittances:
Direct diaspora remittances played a pivotal role in helping Nigeria balance its external financial obligations. Between January and July 2023, these remittances totaled an impressive $1.9 billion. In January, direct remittances amounted to $79.2 million, demonstrating a consistent financial inflow. February saw a similar trend, with Nigerians abroad sending approximately $83.76 million. In March, Nigeria experienced a substantial diaspora inflow of $138.6 million. April’s remittances stood at $159.04 million, and this upward trend continued, with May recording an increase to $202 million. June marked another significant rise, reaching $297.4 million, before witnessing a slight decline in July, with $241 million remitted to Nigeria.
Additional Insights:
- Nigeria’s total debt servicing expenditure for the first half of 2023 amounted to approximately $1.7 billion.
- President Bola Tinubu’s administration prioritized debt servicing, with higher allocations in two particular months.
- The consistent flow of diaspora remittances continues to be a crucial factor in helping Nigeria meet its external financial obligations.
- Tinubu’s government also successfully serviced a substantial Central Bank of Nigeria (CBN) loan, with N912.32 billion paid off in just three months. This contributed to Nigeria’s overall debt profile, which has now reached N87 trillion.
- Notably, the amount spent on interest payments for the CBN loan in the first quarter of 2023 increased significantly, by 161.47%, compared to the same period in the previous year.
Nigeria’s successful repayment of its external debts and the consistent flow of diaspora remittances reflect prudent financial management practices. These efforts underscore the government’s commitment to fulfilling its external financial obligations while maintaining financial stability.
Source: Legit.ng
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