Nigeria’s debt servicing increases to N6tn – CBN Report --[Reported by Umva mag]

The Central Bank of Nigeria (CBN) has said that Nigeria’s debt servicing expenses reached N6.04 trillion in the first half of 2024, representing a sharp increase of 68.8 per cent from the N3.58 trillion recorded during the same period in 2023.

According to the latest data from the CBN, the Nigerian Government, in servicing debt during the review period, spent about three times what it spent on personnel costs.

This sharp rise in debt service obligations, likely driven by the devaluation of the local currency, the naira for foreign debt repayments, reflects the growing burden on the government as debt repayment consumes a significant portion of its financial resources.

In contrast, personnel costs totalled N2.32tn in H1 2024, a 17.6 per cent rise from N1.97tn spent in H1 2023.

This expenditure pattern indicates that debt servicing is now almost triple the government’s wage bill, raising concerns about the sustainability of the country’s debt profile and the increasing pressure on public finances.

Despite the rising cost of living in Nigeria, the total amount spent on salaries in the first six months of 2024 only increased marginally.

However, in H1 2024, about half of the government’s total expenditures were on debt servicing.

The overall government spending surged to N12.17tn in H1 2024, up from N9.39tn in H1 2023 and represented a 29.6 per cent increase.

This jump in total expenditure, according to the Punch newspaper report on Monday, has further widened the fiscal deficit, which expanded by 27.9 per cent from N6.6tn in H1 2023 to N8.44tn in H1 2024.

GIK/APA

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