FG spends $1.61bn on international payment in Q1 2024′

The federal government spent a total of $1.61 billion on international payments in the first quarter of this year, according to data from the international payment segment of the Central Bank of Nigeria (CBN).

The amount represents a drop of $4 billion compared to $1.65 billion recorded in the same period of 2023.

Details of foreign payment within the period under review showed that total direct remittances declined to $243.510 million from $301.571 million recorded in the same period of 2023, representing a drop of 19.25 per cent.

The payment through letters of credits also declined by 62.43 per cent to $206.358 million at the end of March 2024 from $549.222 million recorded in the comparative period of 2023.

Further analysis showed that the federal government within the first three months of 2024 spent a total of $1.12 billion for servicing foreign debt against $801.363 million it paid in the comparable period of 2023, indicating a surge of 39.76 per cent.

The breakdown of the debt service payment in the first quarter showed that the federal government paid $560.52 million in January this year, an increase of $448.17 million or 397.91 per cent against $112.35 million in the preceding year.

The month of February 2024 saw a relatively moderate outflow standing at $283.22 million, declining by 54.75 per cent compared to the month of January and 2.48 per cent from $288.540 million in the corresponding period of 2023.

The month of March 2024 continued with a downward trend with a slightly lower figure of $276.17 million, yet still posing a notable burden on the country’s fiscal position. The figure dropped by $7.051 million or 2.48 per cent compared with the month of February but went up 31.04 per cent when compared with $400.474 used for servicing debt in March 2023.

In 2023, Nigeria incurred a debt service of $3.5 billion for its external loans, indicating a 55 percent increase from the previous year’s of $2.6 billion. This shows the persistent upward trajectory of debt service-related payments for the country’s external debts, further underscoring the challenges posed by its growing debt burden.