Nigeria has spent a total of $3b on servicing commercial loans, including Eurobonds and Diaspora bonds in four years, data analysis on actual external debt service payments by the Debt Management Office has shown.
According to the data, 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.
Nigeria 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 $1.03b in 2018, which represented 70.03 per cent of the total external debt service cost of $1.5b.
The amount spent on servicing commercial loans in 2019 accounted for 59.08 per cent ($787.8m) of the total external debt service cost of $1.4b.
Last year, the sum of $840.1m was spent on servicing commercial loans, representing 54 per cent of the total external debt service cost of $1.6b.
Commercial loans obtained by Nigeria through Eurobonds rose from $1.50b, as of December 31, 2015 to $10.87b at the end of last year, indicating a $9.37b or 625 per cent increase in five years.
Nigeria had also raised $4b through Eurobonds in September. “Since the Eurobonds were issued as part of the new external borrowing in the 2021 Appropriation Act, the raising of $4b 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.
A recent report by the International Monetary Fund (IMF) had 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,” the report said.
