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Nigeria spends N1.1trn to service foreign debt in Q2’20

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Big trouble, as more Nigerians sink deeper into poverty
A map of Nigeria

By Elizabeth Adegbesan

ECONOMY

The National Bureau of Statistics (NBS) yesterday said Nigeria spent $287 million, about N1.1 trillion, to service its foreign debt in the second quarter of the year (Q2’20).

This represents a 39 percent decline when compared to $472.6 million spent in Q1’20.

The breakdown of the components of debt servicing shows that $70.3 million was paid as principal fee, $119.8 million interest fee, $13.8 million service fee, $78,580 deferred interest, $207,430 for  deferred service, $615,750 as overdue charges indemnity,  $264,910 as waiver /credit, and $2.5 million for commitment service.

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The NBS disclosed this in its Domestic and Foreign debt report for Q2’20 which gave other details that match the earlier report of the Debt Management Office (DMO) on the country’s debt stock.

But the debt servicing expenses covered debts incurred before Q2’’20, indicating that the additional debts incurred this would likely push up the servicing cost in subsequent reports.

Reporting the recent increase in foreign debt, DMO stated: “The increase in the Debt Stock by ?2.4 trillion or $6.59 billion was accounted for by the $3.36 billion Budget Support Loan from the International Monetary Fund (IMF), New Domestic Borrowing to finance the Revised 2020 Appropriation Act including the issuance of the ?162.56 billion Sukuk, and Promissory Notes issued to settle Claims of Exporters.’’

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