External debt rises to $40 billion under Buhari

Nigeria’s total external debt has risen from $10.32 billion on June 30, 2015, to $40.06 billion as of June 30, 2022.

This, according to according to the external debt stock reports by the Debt Management Office, shows that there has been an increase of 288.18 per cent in seven years.

A breakdown shows that in 2015, 36 states had $3.27 billion external debt while the Federal Government had $7.05 billion.

By 2022, states’ external debt rose to $4.56 billion, while the Federal Government’s external debt increased to $35.5 billion.

The debts, according to a The Punch, included loans from multilateral sources such as the World Bank, the African Development bank and the International Monetary Fund.

They also included bilateral loans from China, France, Japan, Germany and India, as well as commercial sources including Eurobonds and Diaspora bonds.

Nigeria’s external debt ballooned as the naira lost value, increasing Nigeria’s debt service burden and worsening its ability to service debt. The International Monetary Fund recently said that the long-term rate of the depreciation of the naira equated to a loss of 10.6 per cent of its value annually since 1973.

According to the IMF, this rate was 1.5 times higher than the long-term rate of the currencies of other emerging markets and developing economies at 7.2 per cent and sub-Saharan Africa at seven per cent over the same time period.

The IMF said, “Its exchange rate underwent more persistent depreciation. Nigeria’s long-term rate of currency depreciation (on average 10.6 per cent annually since 1973) was 1.5 times higher than both EMDE (7.2 per cent) and SSA (seven per cent). Given limited availability of long-term data, it is difficult to estimate the exact reasons.”