The Federal Government’s debt servicing costs for February 2025 witnessed a significant decline, falling from $540 million to $276 million, according to the latest data released by the Central Bank of Nigeria (CBN).
This nearly 50% reduction is a result of the government’s sustained efforts to restructure its debt portfolio, boost dollar liquidity, and ease pressure on the foreign exchange market.
The sharp drop in debt servicing costs is a positive development for Nigeria’s fiscal health, as it provides the government with more financial flexibility to fund critical development projects and meet its obligations.
The restructuring of the debt portfolio, which includes renegotiating terms with creditors and prioritizing concessional loans, has been a key factor in achieving this reduction.
The CBN attributed the decline to improved dollar liquidity, driven by strategic interventions in the forex market and increased foreign exchange inflows. These measures have helped stabilize the exchange rate and reduce the burden on Nigeria’s external reserves, allowing the government to allocate fewer resources to debt servicing.
More details to come.
Discussion about this post