
The sharp depreciation of the naira has significantly impacted Nigeria’s external debt, with a staggering increase of ₦30.03 trillion in naira terms between 2023 and June 2024, despite a slight decrease in dollar value.
Key Data Points
- External Debt Decline in Dollar Terms: Reduced by 0.6% from $43.16 billion in June 2023 to $42.90 billion in June 2024.
- Naira Value Surge: The naira equivalent of external debt jumped 89% from ₦33.25 trillion to ₦63.07 trillion.
- Exchange Rate: Naira depreciated by over 47%, moving from ₦770.30/$1 in 2023 to ₦1,470.19/$1 in 2024.
Debt Composition
- Multilateral Lenders:
- World Bank Group: $16.32 billion (38% of external debt).
- IMF: $1.61 billion (3.75%).
- AfDB: $3.87 billion (9.03%).
- Bilateral Lenders:
- China: $5.07 billion (largest bilateral lender).
- France: $623.55 million.
- Commercial Creditors:
- Eurobonds: $15.12 billion (35.24% of foreign debt).
Broader Economic Challenges
- The depreciation of the naira has amplified Nigeria’s debt burden in local terms, highlighting vulnerabilities in currency stability and debt management.
- The reliance on multilateral and commercial creditors underscores the need for diversified and resilient fiscal strategies.
A Call to Action
President Bola Tinubu has pledged economic reforms to address the debt crisis, with a focus on curbing corruption and implementing innovative strategies to stabilize Nigeria’s economy.
Caption: “Naira’s fall deepens Nigeria’s debt woes—₦30 trillion added to external debt burden in one year.”
Source: Punch