Yemi Cardoso,CBN Governor
Nigeria’s Central Bank of Nigeria (CBN) reports that foreign debt service obligations reached approximately $5.47 billion between January 2024 and February 2025, highlighting the increasing strain on the nation’s revenues and external reserves.
This comes amidst fluctuating foreign exchange direct remittances, which saw a slight year-on-year increase.
According to CBN data, debt service payments experienced significant volatility during the period. The highest monthly outflow was recorded in May 2024, at $854.37 million, while the lowest was in June 2024, at $50.82 million. The fluctuation highlights the pressures on Nigeria’s FX reserves.
Total debt service costs for Q3 2024 amounted to approximately N3.57 trillion, representing a quarter-on-quarter increase of N60 billion or 1.71 percent from Q2. This increase reflects the combined impact of rising external debt service payments and currency depreciation.
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“The fluctuation in debt service payments further buttresses continued pressure on the country’s FX reserves,” a CBN report indicated.
In parallel, the total foreign exchange direct remittances increased by 1.3 percent year-on-year to $180.03 million in the first two months of 2025. This increase offers a measure of relief amid concerns over declining remittances in 2024.
The month-on-month breakdown showed that January 2025 remittances stood at $54.44 million, down from $138.56 million in January 2024. However, February 2025 saw a substantial increase to $125.59 million, representing a 220.8 percent growth from February 2024.
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Nigeria’s foreign debt service hits $5.47 bln amidst fluctuating FX remittances.
“While there were concerns over the decline in total remittances to the country in 2024, despite the surge in the number of Nigerians relocating abroad, the inflow in the first two months of 2025 has shown signs that reforms by the CBN are working,” a financial analyst commented.
Total foreign exchange direct remittances for 2024 closed at $1.91 billion, a 3.5 percent decrease from the $1.98 billion reported in 2023.
Source:Global Financial Digest
