The Central Bank of Nigeria disclosed that $5.47 billion was spent on foreign debt servicing from January 2024 to February 2025, indicating increased pressure on the country’s financial resources. Meanwhile, foreign direct remittances rose by 1.3% YoY to $180.03 million in early 2025, signaling a potential recovery amid previous declines in remittances during 2024.
The Central Bank of Nigeria (CBN) has reported that the nation incurred $5.47 billion in foreign debt servicing costs from January 2024 to February 2025. This amounts to increasing pressure on national revenues, external reserves, and overall fiscal stability. In the same period, direct foreign exchange remittances rose 1.3% Year-on-Year (YoY) to $180.03 million.
Debt servicing peaked at $854.37 million in May 2024, marking the highest outflow during this period, while June experienced the lowest payment at $50.82 million. The CBN data indicated a 1.9% rise in debt service obligations from $276.17 million in March to $283.22 million in February. The total debt service cost for the third quarter of 2024 reached approximately N3.57 trillion—a 1.71% increase compared to N3.51 trillion in the preceding quarter.
There was a notable decrease in debt service payments, declining by 22.1% to $215.20 million in April 2024, followed by a sharp increase of 297% in May to $854.37 million. The obligations fell to $50.82 million in June, only to rise drastically by 967.4% to $542.50 million in July. Other fluctuations occurred as borrowing obligations plummeted by 48.4% to $279.95 million in August, and then jumped 84.2% to $515.81 million in September.
Payments remained stable in October at $515.86 million. Nonetheless, figures declined by 54.9% to $232.50 million in October before climbing 41.4% to $328.91 million in December. January 2025 saw a substantial increase to $540.67 million before experiencing a reduction of 48.8% to $276.73 million in February 2025. These variations underscore the ongoing strain on the country’s foreign exchange reserves.
Additionally, total debt servicing costs which include both external and domestic obligations surged in the third quarter of 2024, primarily due to elevated external debt servicing payments and currency depreciation. On the remittance front, total direct remittances for the first two months of 2025 reached $180.03 million, showing signs of positive recovery despite earlier declines in 2024.
The CBN’s data indicates that remittances stood at $177.7 million for the first two months of 2024; however, January 2025 saw a decline to $54.44 million from January 2024’s $138.56 million. Conversely, February 2025 experienced a significant increase to $125.59 million, marking a 220.8% growth year-over-year from February 2024’s $39.15 million. While concerns about total remittances declining in 2024 arose despite an increase in Nigerians relocating abroad, recent figures suggest that CBN reforms may be yielding positive results.
In summary, Nigeria’s financial landscape has been significantly impacted by foreign debt servicing, which totaled $5.47 billion over 14 months. The CBN’s reporting highlights substantial fluctuations in monthly payments, contributing to the strain on the nation’s fiscal stability. Despite challenges in remittances in 2024, recent improvements in early 2025 suggest potential recovery driven by CBN reforms. Overall, these developments warrant close monitoring in relation to Nigeria’s economic health and foreign exchange reserve management.
Original Source: www.arise.tv
