Business

Foreign debt servicing gulps almost $1bn in two months

Published

1 month ago

July 13, 2026

Nigeria spent nearly $1bn servicing its foreign loans in the first two months of 2026, as external debt repayments rose amid increasing capital outflows from the economy.

The figure, obtained from the Central Bank of Nigeria’s February 2026 Economic Report, showed that the country spent $440m on foreign loan repayments in January and $480m in February, bringing the total debt servicing bill for the two months to $920m.

The report showed that total capital outflows rose significantly in February, driven largely by higher capital transfers and increased loan repayments. According to the CBN, “Capital outflows increased, mainly on account of higher capital transfers in the review period. Total capital outflow rose to $2.75bn, from $1.63bn in the preceding month.”

The apex bank attributed the increase primarily to a sharp rise in capital transfers, although debt repayments also contributed to the higher outflows. It stated, “The development was driven mainly by a 91.53 per cent increase in capital transfers to $2.26bn, relative to the level in the preceding month. Outflow through loan repayments also rose to $0.48bn from $0.44bn in January 2026.”

The report added that dividend repatriation declined during the review period. “In terms of share, capital transfers accounted for 82.18 per cent of total capital outflows, loan repayments (17.45 per cent), while repatriation of dividends constituted the balance,” the CBN noted.

An analysis of the figures showed that debt repayments accounted for nearly one-fifth of Nigeria’s total capital outflows in February, highlighting the growing burden of servicing the country’s external obligations.

The report also indicated that the banking sector accounted for the largest share of capital outflows at 45.96 per cent, followed by the financing sector at 26.10 per cent, oil and gas at 15.72 per cent, telecommunications at 3.51 per cent, and production/manufacturing at 2.62 per cent, while other sectors made up the balance.

It also showed that Lagos accounted for 62.90 per cent of capital outflows, followed by the Federal Capital Territory at 37.04 per cent, with Ondo, Ogun and other states accounting for the remainder.

Despite the increase in capital outflows, the CBN said Nigeria’s external position remained strong during the period. In its summary of economic developments, the bank stated that “despite heightened geopolitical risks and trade tensions, the external sector recorded a higher trade surplus and capital inflows, due largely to lower import bills and increased capital transfers.”

It added that foreign reserves rose to $50.12bn in February from $48.88bn in January, providing import cover of 9.61 months, well above the international benchmark of three months.

The PUNCH earlier reported that Nigeria spent about $5.21bn servicing external debt obligations in 2025, accounting for more than 72 per cent of the country’s total international payments during the year, according to the data obtained from the Central Bank of Nigeria.

Figures published on the CBN website indicated that external debt service rose from $4.66bn in 2024 to $5.21bn in 2025, representing an increase of $551.86m or about 11.9 per cent year-on-year.

Nigeria’s public external debt is projected to rise by $20.7bn by 2027, according to the International Monetary Fund. The IMF disclosed this in its 2026 Article IV Consultation report on Nigeria, projecting that public external debt would increase from $51.9bn in 2025 to $72.6bn by 2027.

The projected increase represents a 39.9 per cent rise within two years and underscores growing concerns over the country’s debt burden despite recent improvements in macroeconomic stability.

According to the Fund’s Balance of Payments projections, public external debt is expected to rise from $51.9bn in 2025 to $66.5bn in 2026 before climbing further to $72.6bn in 2027.

The IMF’s projection broadly aligns with the latest Debt Management Office data, which showed that Nigeria’s public external debt stood at $51.86bn as of December 31, 2025. Based on the Fund’s forecast, the debt stock would increase by about $20.74bn between the end of 2025 and 2027.

Public external debt service due is expected to increase from 8.1 per cent of exports of goods and services in 2025 to 8.8 per cent in 2027, after easing to 5.0 per cent in 2026. The Fund further projected that interest payments on public debt would rise from $2bn in 2025 to $3bn by 2027.

At the Federal Government level, debt servicing is expected to continue consuming more than half of government revenue. The IMF estimated that interest payments absorbed 53.2 per cent of Federal Government revenue in 2025 and projected the ratio at 53.7 per cent in 2026 before easing marginally to 52.4 per cent in 2027.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, earlier faulted Nigerians, especially analysts and commentators, for criticising government borrowing without considering the purpose, cost and expected returns of such debt.

Oyedele spoke in Abuja at the Fellowship Award Ceremony and 2nd Biennial Conference of the Capital Market Academics of Nigeria. He said, “When analysts go on TV and join the populist view to accuse the government of borrowing, you are doing a disservice. The relevant question is never simply how much debt.

“It is always debt for what and at what cost, against what return, and repaid on what terms. A nation, a state, or a business that borrows to finance a productive asset generating returns above the cost of that capital is not behaving recklessly; it is behaving rationally.”

punch.ng

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Business

Restoring fuel subsidy will reverse Nigeria’s economic gains

Published

7 hours ago

August 24, 2026

Oluwagbenga Olaoye

The renewed call for the restoration of petrol subsidy under any guise demands a clear-eyed examination of what Nigeria has gained from reform and what the country would have to surrender by reversing course.

The scale of the problem is important to remember. In 2022, when Nigeria was struggling with declining oil production and weak revenues, the country spent about $10 billion on fuel subsidies. The World Bank also warned that the subsidy was consuming resources that could otherwise have gone into education, healthcare, infrastructure and social protection.

This is the system that the administration of President Bola Ahmed Tinubu inherited and boldly decided to change.

At the Federal Government’s recent presentation of “Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented,” the Honourable Minister of Finance and Coordinating Minister of the Economy, Dr Taiwo Oyedele, disclosed that subsidy savings mobilised N15.8tn in resources for the Federation between June 2023 and December 2025.

Of this amount, approximately N5.43tn accrued to the Federal Government, N6.52tn to states and N3.88tn to local governments.

It is important to explain these figures honestly. The N15.8tn is not sitting in a government account as a separate pool of cash called “subsidy savings.” It represents resources released within the Federation’s wider fiscal system and made available across the three tiers of government.

The additional resources available to states and local governments have strengthened their capacity to meet salaries and pensions obligations and to invest in infrastructure and essential services, including primary healthcare, basic education, roads and other needs. At the federal level, the broader fiscal space created by the reforms has supported major investments and obligations that would have been considerably more difficult to sustain under the old subsidy regime.

The Federal Government’s Reform Scorecard records approximately N6.47tn in additional expenditure on strategic infrastructure, covering major investments in transport, housing, agriculture, security and other strategic projects. These include major national corridors such as the Lagos-Calabar Coastal Highway, Sokoto-Badagry Superhighway, and the Trans-Sahara Superhighway.

The reforms have also made room for significant investments in human capital and social support. Over 10 million Nigerian households have benefited from social transfers. The administration has also extended more than N400bn towards landmark social investment initiatives like the Nigerian Education Loan Fund, NELFUND (N223.8bn), the MOFI Real Estate Investment Fund, MREIF (N150bn) and the Nigerian Consumer Credit Corporation, CREDICORP (N50bn).

Renewed domestic and foreign investor confidence founded on the reforms has helped make the Nigerian stock market the world’s best-performing in 2026, pushed the external reserves to the highest level in almost 20 years, and helped the country grow oil production to exceed its OPEC quota for the first time in years.

The additional fiscal space has also supported wage adjustments, minimum-wage obligations and pensions, while expanding the capacity for investments in education, healthcare, agriculture, electricity, security and other critical areas of national development.

Nigeria is also entering a new phase in its petroleum sector, with marked expansion in domestic refining capacity. Reversing policy now will undermine this progress and introduce fresh uncertainty for investors at precisely the time Nigeria should be consolidating domestic refining and strengthening energy security.

Our Reform Scorecard also assesses the economic harm that the reforms have helped Nigeria avert. Had the subsidy regime remained unaddressed, petrol scarcity would have returned, pushing prices above N3,000 per litre on the black market. The legacy Ways and Means financing, which stood at about N30 trillion in May 2023 and has since been curtailed, would have doubled to N60 trillion or more. The Scorecard projects that, without the reforms, the inherited situation of 27 States unable to reliably pay salaries would undoubtedly have worsened.

There is another important argument being overlooked. Nigeria already carries a second energy subsidy, on electricity consumption, which cost the country an additional N3.14tn between June 2023 and December 2025. This subsidy helps bridge the gap between actual power production costs and the capped tariffs paid by most consumers. Reintroducing a petrol consumption subsidy on top of this would deal a double blow to Nigeria’s fiscal position.

The above illustrates an important point: restoring the subsidy would almost instantly return Nigeria to the economic conditions of 2022, recreating the same fiscal pressures, distortions, scarcity and incentives for arbitrage that made the old system unsustainable in the first place.

We are not claiming that the reforms have solved all of Nigeria’s economic challenges; there is indeed still much work to be done to translate improved fiscal capacity into better services, jobs, infrastructure and living standards. But the proper response to the hardship associated with reform is not to dismantle the reform; it is to accelerate the benefits – which remains what the Tinubu administration is resolutely focused on.The objective is clear: to move public resources away from subsidising consumption and towards investing in the Nigerian people and the productive foundations of lasting prosperity.

This is also why the debate over restoring subsidy must ultimately come down to hard choices. Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians? Do we restore subsidy, or preserve higher allocations to states and local governments? Do we restore subsidy, or continue funding roads, rail, power and security? Do we restore subsidy, or strengthen the fiscal capacity required to expand healthcare, education and social protection for vulnerable Nigerians?

It is equally significant that the Organised Private Sector and the wider economic community have cautioned against reversing the reform, recognising that fiscal sustainability, policy stability and a competitive downstream petroleum sector are essential to investment, job creation and economic growth.

Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model.

We do not downplay or deny the challenges associated with subsidy removal and other major reforms. President Bola Tinubu and his administration are daily working – and succeeding – at translating these sacrifices into improved living standards, stronger public services and greater economic opportunities for the Nigerian people.

Idris is the Minister of Information and National OrientationRestoring fuel subsidy will reverse Nigeria’s economic gains

This is the system that the administration of President Bola Ahmed Tinubu inherited and boldly decided to change.

Of this amount, approximately N5.43tn accrued to the Federal Government, N6.52tn to states and N3.88tn to local governments.

Our Reform Scorecard also assesses the economic harm that the reforms have helped Nigeria avert. Had the subsidy regime remained unaddressed, petrol scarcity would have returned, pushing prices above ₦3,000 per litre on the black market. The legacy Ways and Means financing, which stood at about ₦30 trillion in May 2023 and has since been curtailed, would have doubled to ₦60 trillion or more. The Scorecard projects that, without the reforms, the inherited situation of 27 States unable to reliably pay salaries would undoubtedly have worsened.

The objective is clear: to move public resources away from subsidising consumption and towards investing in the Nigerian people and the productive foundations of lasting prosperity.

This is also why the debate over restoring subsidy must ultimately come down to hard choices. Do we restore petrol subsidy, or sustain student loans and consumer credit for young Nigerians? Do we restore subsidy or preserve higher allocations to states and local governments? Do we restore subsidy or continue funding roads, rail, power and security? Do we restore subsidy, or strengthen the fiscal capacity required to expand healthcare, education and social protection for vulnerable Nigerians?

Nigeria cannot build tomorrow’s economy by returning to yesterday’s unsustainable subsidy regime. We have moved beyond that model.

Idris is the Minister of Information and National Orientation.

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Business

Dangote refinery expands free fuel delivery to four states

Published

7 hours ago

August 24, 2026

Newsbreak365_Admin

The Dangote Petroleum Refinery says it has expanded its free petroleum products delivery initiative to Kano, Imo, Anambra and Nasarawa states, a move it says is expected to reduce distribution costs for independent petroleum marketers and create room for lower petrol prices.

According to a statement on Sunday, the initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta states, is designed to bring petroleum products closer to marketers and retailers while eliminating the cost of transporting products over long distances from the refinery to different parts of the country.

By absorbing delivery costs, the refinery is reducing one of the major expenses embedded in the downstream petroleum products distribution chain.

Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Dangote Industries Limited, Fatima Aliko Dangote, said the initiative was aimed at ensuring that the benefits of domestic refining translated into savings for businesses and consumers.

“The value of domestic refining must ultimately be felt beyond the refinery gate. By absorbing the cost of delivering petroleum products to our customers, we are removing a significant component of the distribution burden and creating room for those savings to flow through the value chain to consumers. Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria.”

The expansion was reportedly welcomed by the Independent Petroleum Marketers Association of Nigeria, which said the initiative would reduce some of the financial and logistical pressures confronting independent petroleum marketers and contribute to lower prices for consumers.

National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, was quoted as saying that the initiative addressed a longstanding challenge in the petroleum products distribution chain, where marketers commit substantial funds to product purchases and may then wait for extended periods before their orders are loaded and transported.

“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers. There has been the issue of financial hold-up, whereby marketers pay for products and are not loaded for days and weeks, and they suffer unnecessary hardship bringing the product down,” he stated.

According to him, the refinery’s delivery arrangement reduces the period for which marketers’ funds remain tied up, improves cash flow and allows businesses to deploy their capital more efficiently.

Dangote said the reduction in distribution costs is particularly significant for marketers supplying areas far from the refinery, as the transportation of petroleum products over long distances attracts additional expenses associated with haulage, vehicle operations, driver costs, insurance, road risks and other logistics.

It was stated that removing or reducing such costs could improve the economics of supplying distant markets and provide marketers with greater room to compete on retail prices.

The initiative also reduces the operational risks associated with moving large volumes of petroleum products over long distances by taking products closer to their destination markets.

The expansion comes as Nigeria’s downstream petroleum sector continues to adjust to increased domestic refining capacity and a more competitive market environment.

The Dangote refinery, with a capacity of 700,000 barrels per day, has been supplying refined petroleum products to the domestic market while also expanding its presence in international markets.

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Business

Banks account for 92% of NFIU suspicious reports

Published

8 hours ago

August 24, 2026

Newsbreak365_Admin

The Nigerian Financial Intelligence Unit has disclosed that banks, fintech companies and other reporting entities submitted 42,082 Suspicious Transaction Reports to the agency in 2025.

The figure was contained in the NFIU’s 2025 Annual Report, which highlighted continued risks to Nigeria’s financial system and increased regulatory monitoring of transactions.

The agency also received 41,716,214 Currency Transaction Reports and 10,513 Suspicious Activity Reports during the year.

“During the review period, the NFIU received a total of 41,716,214 CTRs, 42,082 STRs, and 10,513 SARs,” the report stated.

The NFIU said its reporting framework covers threshold-based transactions, suspicious transactions and activities, as well as regulatory submissions relating to anti-money laundering, counter-terrorism financing and counter-proliferation financing compliance.

It noted that it collaborates with the Central Bank of Nigeria, National Insurance Commission, Securities and Exchange Commission and the Special Control Unit Against Money Laundering to ensure that reporting entities comply with applicable regulations.

Deposit Money Banks accounted for the bulk of STR filings, submitting 38,715 reports, representing about 92 per cent of the total received from the various sectors.

Other Financial Institutions submitted 2,185 STRs, while Designated Non-Financial Businesses and Professions accounted for 1,029. Capital market operators and insurance companies filed 104 reports, while Virtual Asset Service Providers, including cryptocurrency-related businesses, submitted 49.

Banks also dominated Suspicious Activity Reports, contributing 8,313 of the 10,513 filings recorded in 2025. Other Financial Institutions accounted for 1,816, capital market and insurance companies filed 295, while Virtual Asset Service Providers submitted 89. The DNFBP sector recorded no SAR during the year.

The report further showed that financial institutions filed more than 41.7 million Currency Transaction Reports. Deposit Money Banks accounted for 37,214,139 filings, equivalent to about 89.2 per cent of the total, while Other Financial Institutions submitted 4,212,466.

Capital market operators and insurance companies contributed 289,296 CTRs, while Virtual Asset Service Providers filed 313.

According to the NFIU, Section 11 of the Money Laundering (Prevention and Prohibition) Act requires financial institutions to report transactions exceeding N5m for individuals and N10m for legal entities within seven days.

The agency added that Section 3(1) of the law mandates the reporting of incoming and outgoing transfers above $10,000 within 24 hours.

Data from the four quarters showed a steady rise in STR filings by banks. Reports increased from 9,134 in the first quarter to 9,658 in the second, 9,891 in the third and 10,032 in the fourth quarter.

Currency Transaction Reports from Deposit Money Banks followed a similar upward trend, rising from 7,040,493 in the first quarter to 8,197,292 in the second, 10,885,247 in the third and 11,091,107 in the fourth quarter.

Among Other Financial Institutions, STR filings stood at 451 in the first quarter and 432 in the second before climbing to 719 in the third and falling to 583 in the fourth.

The NFIU also reported increased activity among Virtual Asset Service Providers. The sector recorded no STRs during the first half of 2025 but filed 17 in the third quarter and 32 in the fourth quarter.

VASPs also submitted 28 SARs in the first quarter, 12 in the second, 24 in the third and 25 in the fourth. Their CTR filings emerged in the second half of the year, with 103 reports in the third quarter and 210 in the fourth.

The agency disclosed that reporting entities submitted 28,133,909 reports involving Politically Exposed Persons during 2025.

Deposit Money Banks accounted for most of the PEP filings, recording 7,263,557 in the first quarter, 5,658,079 in the second, 6,235,585 in the third and 8,225,572 in the fourth.

Other Financial Institutions recorded a significant increase in PEP reports, rising from just 12 in the first quarter to 617,286 in the fourth quarter. Capital market and insurance institutions submitted 28,561 reports, while VASPs recorded none.

The NFIU also disclosed that its Designated Non-Financial Businesses and Professions Division conducted joint on-site examinations of 29 reporting entities in the Federal Capital Territory.

The entities were drawn from the real estate, casino, precious metals and stones dealing, and consultancy sectors.

According to the report, the exercise resulted in 20 new registrations on the RapidAML portal and subscriptions to NIGSAC, alongside the submission of 1,029 Suspicious Transaction Reports.

Despite the increased compliance activity, the number of STRs received in 2025 was significantly lower than the previous year. STR filings fell by 40,061, from 82,143 in 2024 to 42,082 in 2025, representing a decline of about 48.8 per cent.

Suspicious Activity Reports also dropped by 12,851, from 23,364 in 2024 to 10,513 in 2025, representing a reduction of approximately 55 per cent.

The contrasting figures indicate that while reporting entities recorded significantly higher volumes of threshold-based transactions and PEP disclosures in 2025, suspicious transaction and activity reports declined sharply compared with the previous year.

Source: punchng.com

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