The Central Bank of Nigeria (CBN) has revealed that external debt servicing cost the country approximately $5.47 billion between January 2024 and February 2025, exacerbating the strain on national revenue, foreign reserves, and fiscal stability.

Additionally, total foreign exchange direct remittances rose by 1.3% year-on-year (YoY) to $180.03 million in the first two months of 2025, according to data from the apex bank.

The CBN reported that debt servicing peaked at $854.37 million in May 2024, the highest outflow during the review period, while the lowest monthly payment was $50.82 million in June 2024.

Figures from the bank’s website indicate that debt servicing obligations increased by 1.9% to $283.22 million in February 2025, compared to $276.17 million in March 2024.

Meanwhile, total debt servicing costs for Q3 2024 stood at approximately N3.57 trillion, reflecting a quarter-on-quarter increase of N60 billion or 1.71% from the N3.51 trillion recorded in Q2.

Debt servicing obligations declined by 22.1% to $215.20 million in April 2024 but surged by 297% in May to $854.37 million, marking the highest single-month expenditure. In June, obligations fell sharply by 94% to $50.82 million, the lowest in the period under review, before rising by 967.4% to $542.50 million in July.

Borrowing obligations also fluctuated, dropping by 48.4% to $279.95 million in August, before rising by 84.2% to $515.81 million in September. The figure remained nearly unchanged in October, with a marginal 0.01% increase to $515.86 million.

Debt servicing costs decreased by 54.9% to $232.50 million in November before climbing by 41.4% to $328.91 million in December. In January 2025, payments increased by 64.4% to $540.67 million but fell by 48.8% to $276.73 million in February 2025.

The volatility in debt servicing payments underscores the persistent pressure on the country’s foreign exchange reserves. Furthermore, the total debt servicing cost, encompassing both external and domestic obligations, surged in Q3 2024 due to increased external debt payments and currency depreciation.

Meanwhile, total foreign exchange direct remittances increased by 1.3% YoY to $180.03 million in the first two months of 2025, according to CBN data.

The CBN’s “International Payments” report shows that total foreign exchange direct remittances stood at $177.7 million in the first two months of 2024.

A month-on-month (MoM) breakdown reveals that total direct remittances declined to $54.44 million in January 2025 from $138.56 million in January 2024. However, in February 2025, remittances surged significantly to $125.59 million, representing a 220.8% increase from the $39.15 million recorded in February 2024.

Total foreign exchange direct remittances closed 2024 at $1.91 billion, a 3.5% decline from the $1.98 billion recorded by the CBN in 2023. While concerns persist over the overall decline in remittances despite the rising number of Nigerians relocating abroad, the positive trend in early 2025 suggests that the CBN’s policy reforms are yielding results.