TheCapital

Nigeria Spends $3bn Servicing Commercial Loans In Four Years

 Breaking News

Nigeria Spends $3bn Servicing Commercial Loans In Four Years

Nigeria Spends $3bn Servicing Commercial Loans In Four Years
October 25
05:21 2021

Nigeria spent $3bn in four years on servicing commercial loans, including Eurobonds and Diaspora bonds, according to an analysis of data on actual external debt service payments from the Debt Management Office.

The cost of commercial loan servicing rose from $91.3m in 2016 to $840.1m in 2020, showing an increase of $748.8m or 820.15 per cent.

The country paid $91.3m to service commercial loans in 2016 which accounted for 26 per cent of the total external debt service cost of $353.1m.

In 2017, $158.8m was spent on servicing commercial loans, accounting for 34.21 per cent of the total external debt service cost of $464m.

The country serviced its commercial loans with $1.03bn in 2018 which represented 70.03 per cent of the total external debt service cost of $1.5bn.

In 2019, the amount spend on servicing commercial loans accounted for 59.08 per cent ($787.8m) of the total external debt service cost of $1.4bn.

Last year, $840.1m was spent on servicing commercial loans, representing 54 per cent of the total external debt service cost of $1.6bn.

The commercial loans obtained by Nigeria through Eurobonds rose from $1.50bn as of December 31, 2015 to $10.87bn at the end of last years, indicating a $9.37bn or 625 per cent increase in five years.

It was also reported in September that the country raised $4bn through Eurobonds.

“Since the Eurobonds were issued as part of the new external borrowing in the 2021 Appropriation Act, the raising of $4bn through Eurobonds provides a significant amount of funds to finance projects in the Act, thus contributing to the implementation of the 2021 Appropriation Act,” the DMO had said in a statement.

The Federal Government plans to return to the Eurobonds market for the balance of its $6.1bn external borrowings. This month, the DMO had a global investors meeting and roadshow in London.

The International Monetary Fund, in a recent report, said Nigeria, Egypt, and Ghana had the highest weight at the emerging bond market index.

“In terms of the relative importance, Egypt, Nigeria and Ghana have the highest weights at 2.6, 1.5, and 1.5 per cent of EMBIG Global Diversified respectively,” it said.

About Author

Opeyemi

Opeyemi

Related Articles

0 Comments

No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.