Nigeria spent 50% of dollar outflows to service foreign debt in 2023

Nigeria spent $3.07 billion out of the $6.11 billion of its dollar payments between January and October 2023 to service foreign debts.

Data from the Central Bank of Nigeria (CBN) revealed that it paid $112.35 million on external debt servicing in January; $288.54 million in February; $400.47 million in March and $92.85 million in April. In May, it paid $221.05 million; $54.36 million in June; $641.69 million in July; $309.96 million in August; $439.06 million in September and $509.73 million in October.

The total figure of $3.07 billion is 38% higher than the $2.22 billion spent in the corresponding period of 2022, underscoring the growing burden of foreign debt on the nation’s economy.

A further check revealed that Direct remittance was about 31% ($1.91bn) of the foreign payments ($6.11bn) recorded within the period while Letters of credit gulped $1.14bn (19%) of the dollar payments.

This represented a decline of 1% and 7% in direct remittance and letter of credit respectively in comparison to the corresponding period of 2022.

A Letter of Credit (LC) is a mode of payment used for the importation of visible goods.