Nigeria spends $817m on debt servicing as remittances rise

BY MOTOLANI OSENI

Nigeria spent $817.41 million on debt servicing in the first two months of 2025, while diaspora remittances rose to $180.3 million, reflecting a marginal increase from the previous year. Despite a 3.1 per cent decline in debt payments compared to the $843.74 million recorded in the same period of 2024, remittances showed a slight uptick of 1.46 per cent from $177.71 million.

According to data from the Central Bank of Nigeria (CBN), the country spent $540.67 million on debt servicing in January 2025 and another $276.73 million in February. This is a decrease from the $560.51 million and $283.21 million recorded in the corresponding months of 2024.

For the full year 2024, Nigeria paid a total of $4.65 billion on debt servicing, with August accounting for the highest monthly payment of $854.36 million. On the other hand, diaspora remittances, which had declined to $54.44 million in January 2025 from $173.37 million in December 2024, rebounded to $125.58 million in February. Total remittances for 2024 stood at $1.91 billion, with the highest inflow of $365.44 million recorded in August.

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CBN Governor, Olayemi Cardoso, has projected a surge in remittances, citing Nigeria’s currency adjustment as a key factor attracting foreign investments. He noted that while the naira’s devaluation had posed challenges due to the country’s import dependency, it had also created investment opportunities.

“I see a lot of foreign investors coming in to take advantage of it. At this stage, our currency is a lot more competitive, and the implications for exports and productive activity are significant,” Cardoso said. He expressed optimism that diaspora remittances would double this year, driven by ongoing market reforms.

Cardoso also highlighted recent policy measures aimed at stabilising the forex market, including narrowing the gap between bureau de change (BDC) and official exchange rates. “Our efforts have resulted in significant milestones in 2024, with over $6 billion in foreign capital inflow and external reserves exceeding $40 billion, signaling growing investor confidence,” he stated.

He further underscored the CBN’s commitment to maintaining stability, strengthening regulatory mechanisms, and ensuring compliance with best practices in the forex market. He pointed to new initiatives such as non-resident BVN registration and diaspora-focused banking products as part of efforts to boost inflows.

“My discussions with the diaspora show strong commitment to increasing remittances, and we are already seeing positive results. There are good things ahead on the foreign exchange side,” Cardoso concluded.