Nigeria’s External Debt May Hit $45.1bn by 2024, Sparking Concerns

Nigeria’s external debt is projected to rise to $45.1 billion by the end of 2024, raising alarms about a potential debt crisis as the Federal Government pushes forward with plans for additional external borrowing. A recent report from the Debt Management Office (DMO) revealed that the nation’s external debt increased by $780 million in the second quarter of 2024, growing from $42.12 billion in March to $42.9 billion by June.

Last week, the Federal Executive Council (FEC) approved a $2.2 billion external borrowing plan under the 2024 Appropriation Act financing program. Finance Minister Wale Edun, speaking after the FEC meeting, disclosed that the borrowing package includes $1.7 billion in Eurobond offerings and $500 million in Sukuk bonds. Edun emphasized that Nigeria’s ability to access international capital markets reflects global confidence in President Bola Ahmed Tinubu’s economic reforms.

The new borrowing plan, if implemented, will push Nigeria’s external debt to $45.1 billion by year-end. This comes as the Central Bank of Nigeria reported that the country spent $3.58 billion servicing its external debt in the first nine months of 2024, a sharp 39.77% increase from the $2.56 billion spent during the same period in 2023.

The DMO also highlighted in October 2024 that Nigeria’s total debt stock had surged to N134.3 trillion by the end of June. Experts have raised concerns about the country’s rising debt burden. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), criticized the growing reliance on borrowing, pointing to inadequate revenue generation and persistent infrastructure deficits as critical challenges.