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Nigeria’s eight-month debt service bill hits $2.86bn – CBN

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Nigeria spent a total of $2.86bn servicing external debt in the first eight months of 2025, according to the international payment data from the Central Bank of Nigeria on Wednesday. This accounted for 69.1 per cent of the country’s total foreign payments of $4.14bn in the period.

In the same eight-month stretch of 2024, debt service stood at $3.06bn, representing 70.7 per cent of total foreign payments of $4.33bn. The figures show that while the absolute value of debt service fell by $198m between 2024 and 2025, the share of debt in overall foreign payments has remained persistently high, with about seven out of every ten dollars leaving the country used to meet debt obligations.

The monthly breakdown highlights the volatility of Nigeria’s repayment schedule. In January 2025, $540.67m was spent compared with $560.52m in January 2024, a fall of $19.85m or 3.5 per cent. February 2025 recorded $276.73m, slightly below the $283.22m in February 2024, down by $6.49m or 2.3 per cent.

March 2025 surged to $632.36m against $276.17m in March 2024, an increase of $356.19m or 129 per cent. In April 2025, payments reached $557.79m, which was $342.59m or 159 per cent higher than the $215.20m of April 2024.

May 2025 stood at $230.92m, sharply lower than the $854.37m in May 2024, a drop of $623.45m or 73 per cent. June 2025 rose to $143.39m compared with $50.82m in June 2024, a rise of $92.57m or 182 per cent.

July 2025 fell to $179.95m, down by $362.55m or 66.8 per cent from $542.5m in July 2024. By August 2025, debt service climbed to $302.3m, which was $22.35m or 8 per cent higher than the $279.95m of August 2024.

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Month-on-month trends in 2025 further underline the erratic nature of the payments. The country began January with $540.67m, which dropped by $263.94m or 48.8 per cent to $276.73m in February.

March then spiked to $632.36m, up by $355.63m or 128.5 per cent. April fell to $557.79m, down by $74.57m or 11.8 per cent from March. May dropped to $230.92m, down by $326.87m or 58.6 per cent. June slipped further to $143.39m, a decline of $87.52m or 37.9 per cent.

July rebounded slightly to $179.95m, an increase of $36.56m or 25.5 per cent, before August rose again to $302.3m, which was $122.35m or 67.9 per cent higher than July.

The dominance of debt service in Nigeria’s foreign obligations is clear. In the eight months of 2025, $2.86bn of the $4.14bn total foreign payments went to debt, giving it a share of 69.1 per cent. A year earlier, $3.06bn of the $4.33bn total foreign payments went to debt, accounting for 70.7 per cent.

These figures show that, despite spending nearly $200 million less on debt this year compared to 2024, debt still accounted for the overwhelming majority of foreign exchange outflows.

This high ratio of debt service to total foreign payments highlights Nigeria’s vulnerability, as nearly three-quarters of its international outflows are being channelled into debt repayment rather than critical imports or investments.

Fitch Ratings recently noted that Nigeria’s external debt service will increase from $4.7bn in 2024 to $5.2bn in 2025. This includes $4.5bn in amortisation payments and a $1.1bn Eurobond repayment due in November. Fitch noted, “Government external debt service is moderate but expected to rise to $5.2bn in 2025 (with $4.5bn of amortisations, including a $1.1bn Eurobond repayment due in November 2025), from $4.7bn in 2024, and fall to $3.5bn in 2026.”

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The agency also cited a minor delay in the payment of a Eurobond coupon due on March 28, 2025, as a reflection of persistent challenges in public finance management. Although Nigeria’s external debt service remains within manageable levels, Fitch warned that high-interest costs, weak revenue performance, and limited fiscal space remain significant concerns.

Fitch said general government debt was expected to remain at about 51 per cent of GDP in 2025 and 2026. However, it expressed concern over the government’s revenue position, noting that interest payments will consume a substantial portion of income.

It stated, “We expect general government revenue-to-GDP to rise but to remain structurally low (averaging 13.3 per cent in 2025–2026), largely accounting for a high general government interest/revenue ratio, above 30 per cent, with the Federal Government interest/revenue ratio of nearly 50 per cent.”

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Nigerian states’ revenues rise 93%, but education spending drops — World Bank

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The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

See also  Nigerian states’ revenues rise 93%, but education spending drops — World Bank

He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Nigeria promotes investment without building production capacity – UNILAG don

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A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

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Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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Import waivers, insecurity end two-year agric trade surplus

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Import waivers meant to ease hunger and insecurity on farms have led to a deficit, ending a two-year run of surpluses, as Nigeria’s agricultural trade balance swung from a N740.27bn surplus in the first half of 2025 to a N56.13bn deficit in H1 2026, according to agriculture and trade experts.

Recent foreign trade data from the National Bureau of Statistics showed that agricultural exports fell by 33.28 per cent, or N985.14bn, to N1.98tn in H1 2026 from N2.96tn in H1 2025.

Agricultural imports fell by only 8.50 per cent, or N188.74bn, to N2.03tn from N2.22tn over the same period. The gap between the two movements produced a N796.40bn swing in the trade balance.

Nigeria recorded a N365.74bn deficit in H1 2023, when imports of N926.25bn far exceeded exports of N560.51bn. The balance then turned to a N194.92bn surplus in H1 2024 before it widened to N740.27bn in H1 2025.

In separate phone interviews with The PUNCH, Agribusiness experts, including the Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, explained that recent government policy led to the shift.

Banjoko said, “Some waivers were given for products like palm oil and rice, and the import tariffs were drastically reduced. It became more favourable for people to import than to patronise local producers.”

He said the waivers on food commodities hurt domestic producers, even though lower tariffs on tractors and manufacturing equipment helped them.

According to Banjoko, “The effect is that our imports will rise above our exports. Second, we will discourage local production. Thirdly, we will be reducing employment, because some factories will shut down if they are not able to compete.”

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Banjoko also said weak funding for processors compounds the problem. He said foreign direct investment flows mainly into the capital market rather than into production and processing, so local processors cannot scale.

He urged the Federal Government to speed up the Special Agro-Industrial Processing Zones programme. “We should speed up such projects where we can produce enough for our country and start exporting, not look for shortcuts by reducing prices,” Banjoko added.

Meanwhile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, identified two major factors behind the deficit. He said the first was the Federal Government’s decision to allow some food imports to tackle runaway inflation.

Yusuf said, “The first is the decision of the government to allow for some food imports as a result of the challenges of food inflation, which at a point was getting almost completely out of hand.”

He added that insecurity worsened the supply gap and cut export capacity, stating, “Insecurity led many farmers to leave their farms. Many of them have ended up in IDP camps, and quite a number have completely abandoned farming.”

He added that farmers cannot export without output. Yusuf said, “You can only export when you have the output.”

Yusuf also said high input costs and falling produce prices have discouraged farming. He said, “Most of these inputs are imported, so the exchange rate situation has seriously affected the cost of inputs, and the prices of produce have gone down.”

He urged the Federal Government to cut the cost of fertiliser, agrochemicals, machinery and improved seedlings. He also called for a minimum guaranteed price for agricultural produce.

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Yusuf said, “The government can establish a threshold below which, if prices fall, it will give farmers some compensation. That is the way it is done in many other economies.”

Source: punchng.com

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