Nigeria spent N1.47trillion on debt servicing payments in the first half of 2021, data obtained from the Debt Management Office have shown.
In the first quarter of the year, the country spent N1.02trillion on both domestic and external debt servicing, while a total of N445.45billion was spent in the second quarter of 2021.
From January to March 2021, Nigeria spent N612.71billion on domestic debt servicing, while it spent $1bn (N410.33bn) on external debt servicing.
From April to June 2021, Nigeria spent N322.7billion on domestic debt servicing and $299million (N122.7billion) on external debt servicing.
The official exchange rate of the Central Bank of Nigeria ($1 is N410.33) as of October 4 was used for the external debt servicing.
For domestic debt, Nigeria spent N219.29billion in January, N125.09billion in February, N270.33billion in March, N258billion in April, N42.4billion in May, and N22.3billion in June.
In Q1, the government focused on principal repayments, while in Q2, the government focused on interest payments.
A breakdown of the statistics in Q2 shows that the Federal Government spent a total of N322.7billion on the payment of interest, with N50.3bn expended on the redemption of matured Nigeria Treasury Bills.
For external debt servicing in Q1, commercial loans had 76 per cent with a cost of $763.04million (N313.10billion), multilateral had 13 per cent with a cost of $134.04million (N55billion), and bilateral had 11 per cent with a cost of $106.33million (N43.63billion).
For external debt servicing in Q2, commercial loans had 53 per cent with a cost of $157million (N64.4billion), multilateral had 35 per cent with a cost of $103.7million (N42.5billion), and bilateral had 13 per cent with a cost of $38.2million (N15.7billon).
Economists have consistently condemned the borrowing rate of the government on the premise that the loans were being spent on consumption rather than capital projects that can generate revenue to service the debts.
A political economist and former presidential candidate, Prof. Pat Utomi, had explained that the implication of government spending a major amount of its revenue on debt servicing was that the Federal Government borrowed to finance other expenditures that it incurred within the period.
He added that the trend of continuous borrowing would further worsen the economic conditions of the country.