FG spends $357m on external debt servicing in three months

The Debt Management Office, DMO, has said that the Federal Government spent a total of $357.26m in the first three months of 2019 to service external debts.

According to statistics released on Thursday by the DMO in Abuja, commercial loans gulped the largest amount spent on external debt servicing in the first quarter of the year, as a total of $210.76m was spent on commercial loans.

This represented 58.99 per cent of the external debt servicing spending. The commercial loans include Eurobonds whose maturity dates range from 2018 to 2038.

Next in line are Multilateral loans that consumed a total of $79.4m representing 22.22 per cent of the spending on external loan servicing.

These multilateral loans include funds from the International Bank of Reconstruction and Development and the International Development Association, two arms of the World Bank; the African Development Bank and the Islamic Development Bank.

The statistics also showed that a total of $67.1m representing 18.78 per cent was spent on bilateral loans. The bilateral loans are funding from the Export-Import Bank of China that funded the Nigerian Communications Satellite project and the Nigeria National Public Security Communications Systems project.

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They also include projects funded by the Nigeria Railway Modernisation projects (Idu-Kaduna section and Lagos – Ibadan section), Abuja Light Rail project, Nigeria ICT Infrastructure Backbone project, Four Airport Terminals Expansion project, Zungeru Hydroelectric Project and Rehabilitation and Upgrading of Abuja-Keffi-Makurdi Road project.

Other bilateral institutions that lent money to Nigeria included the EXIM Bank of India, the French Development Agency, the Japanese International Cooperation Agency and KFW Germany.

There has been growing concerns over the cost of debt servicing, as a large proportion of the country’s revenue goes into debt servicing.

It would be recalled that the Federal Government had proposed to spend a total of N2.26tn on debt servicing in the 2019 fiscal year. The proposal for debt servicing was more than 25 per cent of the N8.83tn which the Federal Government had proposed for 2019 and 12.44 percent higher than that of 2018.

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