Data from the Central Bank of Nigeria (CBN) reveals that Nigeria spent approximately 70% of its dollar payments in the first quarter of 2024 to service external debts. Out of a total outflow of $1.61 billion during this period, $1.12 billion was used for debt servicing, marking a significant increase from 49% in Q1 2023.
The monthly breakdown of debt service payments shows a substantial obligation, with $560.52 million spent in January, nearly five times higher than January 2023. February saw a moderation but remained significant at $283.22 million, while March witnessed a lower figure of $276.17 million, though still considerable compared to March 2023.
The decline in Nigeria’s foreign exchange reserves has been attributed to debt repayments and other financial obligations, rather than efforts to defend the naira. However, recent data indicates a slight rebound, with reserves increasing by about $262 million over 19 days to reach $32.369 billion as of May 7, 2024, after experiencing a steady decline from $34.45 billion on March 18th due to various economic factors.
Source: Daily Trust