A projection of the Debt Management Office has shown that Nigeria may have to grapple with the payment of $11.62bn in foreign debt in the next 10 years, The Punch reports.
The debt service payment over the 10-year period, 2017 to 2026, includes some principals that will fall due for redemption as well as interests that would have accumulated and redeemed on an annual basis.
Accordingly, 2018, 2021 and 2023 will see Nigeria parting with more than $1bn each year because some Eurobonds issued by the Federal Government will fall due for redemption then.
In 2018, the country will be parting with $1.19bn. This includes a principal redemption of $716.09m and interest payment of $475.8m.
The projection sees Nigeria paying $1.58bn in 2021. This includes principal redemption of $1.12bn and interest payment of $440.59m.
By 2023, the country will have to part with $1.69bn.
The DMO said, “Increased debt service payments would be made in 2018, 2021 and 2023, amounting to $1,193.04m; $1,584.54m; and $1,694.85m, respectively, when the debut 6.75 per cent Jan 2021 $500m 10-year Eurobond issued in 2011 and the $1bn dual-tranche Eurobonds – 5.125 per cent July 2018 $500m five-year and July 2023 $500m 10-year issued in 2013 would be due for redemption.”
Apart from the three years highlighted by the DMO, the country will also part with significant amount of money in debt servicing in the 10-year period.
In the current year, the country will have to part with $144.4m in principal redemption and $524.43m in interest payment.
Similarly, in 2019, the principal to be redeemed will amount to $290.33m, while the interest to be paid will add up to $490.8m.
For 2020, the country will be paying a total of $983.01m; while for 2022, total payment will be $1.18bn.
For 2024, 2025 and 2026, the country is projected to pay total of $1.18bn, $1.18bn and $1.17bn, respectively on existing loans.
Actual payment in each of the years will likely be higher, given that the country continues to make new commitments in terms of securing foreign loans.
The Federal Government is currently rebalancing its foreign debt to local debt ratio as it plans to secure more foreign loans to replace debts from internal creditors that are reputed for higher interest charges.