Good news: Nigeria successfully repays loans collected from IMF, China, others Nexovant
- New data from the DMO showed that in six months, Nigeria has made partial repayments on some loans
- These repayments were made to financial institutions, including the International Monetary Fund and countries
- Despite this, Nigeria still faces a substantial debt burden, now exceeding N130 trillion after recent borrowings
Dave Ibemere, a journalist at Legit.ng, has been reporting on business for over ten years. He has deep knowledge of the Nigerian economy, stock market, and general market trends.
The Nigerian government spent more than $2.24 billion to settle matured external debts between January and June 2024.
Legit.ng has analysed the country’s recent loan repayments using the data obtained from the Debt Management Office (DMO).
Nigeria services its loans collected from the IMF and countries such as China, France, Japan, and Germany. Photo credit: presidency
Source: Facebook
A breakdown of figures showed that in 2024’s first quarter (January to March), the Nigerian government spent $1.12 billion to service debts owed to various foreign entities.
From April to June, another $1.12bil of revenue was used to repay debts owed to countries and institutions such as the World Bank and the International Monetary Fund (IMF).
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Legit.ng has determined that the interest and service fees are major reasons for Nigeria’s debt servicing being so high.
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 $403.68mil and the service fee stood at $25.968mil.
Nigeria’s debt in a snapshot
In the first quarter, the DMO stated that the highest amount paid to service debt was for multilateral loans, which totalled $634.39 million, followed by commercial loans ($282.56mil) and bilateral loans ($197.43mil).
Multilateral loans are funds borrowed from lenders such as the World Bank, IMF, and African Development Bank (AFDB).
A breakdown of the $634.39 million debt repayment shows:
- International Monetary Fund: $409.35 million
- African Development Bank: $9.09 million
- International Fund for Agricultural Development: $3.92 million
- African Development Fund: $8.24 million
- International Development Association: $196.18 million
- European Development Fund: $1.06 million
- Arab Bank for Economic Development in Africa: $0.21 million
- Islamic Development Bank: $6.35 million.
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Bilateral loans are funds that Nigeria borrowed from other countries.
Here is a breakdown of the payments made to countries that lent Nigeria funds for due debt in the first quarter of 2024.
- China: $180.55 million
- India: $3.98 million
- France $860,162
- Germany: $12.02 million.
Snapshot of Nigeria’s second quarter loan repayment
DMO also confirmed that in the second quarter, the highest debt service payment made by the Nigerian government was to multilateral creditors, which stood at $672.01 million.
- International Monetary Fund: $404.24 million
- International Development Association: $131.80 million
- African Development Bank: $104.82 million
- International Bank for Reconstruction and Development: $11.02 million
- African Development Fund: $9.90 million
- Islamic Development Bank: $5.62 million
- European Development Fund: $1.62 million
- International Fund for Agricultural Development: $1.99 million
- Africa Growing Together Fund: $1.01 million.
A total of $43.92 million was also used to service debt to three countries, namely:
- Japan: $0.34 million
- Germany: $12.05 million
- France: $31.54 million
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Other breakdowns show that the debt service repayment of commercial loans totalled $404.45 million while matured Eurobond repayments to investors stood at $293.73 million.
The good news is that Nigeria is not defaulting on its debts collected over the years.
Nigeria pays off debt to airlines
Legit.ng also reported that after years of negotiation, the federal government has repaid airlines 98% of the delayed funding.
The International Air Transport Association (IATA) confirmed this, which led to calls for the final clearance of the remaining 2%.
The IATA believes the remaining amount owed by the government is still substantial and hoped a solution could be found soon.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
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