A report released by the Debt Management Office (DMO) has shown that the Federal Government spent N1.24 trillion servicing debts in the first quarter of 2023.

The report revealed that the Federal Government’s debt obligations grew by 55.71 per cent between the last quarter of 2022 and the first quarter of 2023.

The DMO used the Central Bank of Nigeria (CBN) exchange rate of $1=N460.3 to convert the external debt servicing components to naira.

For domestic debt servicing obligations in the first quarter of 2023, the government paid N56,466,385,798.05 as interest on Nigeria Treasury Bills (NTBs); N723,957,871,169.59 interest on FGN bonds; N8,167,315,068.49 as rentals on Sukuk; N622,808,510.21 as interest on FGN Savings Bond and N84,915,150,796.00 on Promissory notes.

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The DMO added that the FGN Bonds and NTBs that matured during the quarter were refinanced and the reported figures excluded Sinking Fund Charges of the sum of N180,446,143.00 in respect of (IRO) Treasury Bonds managed by the CBN.

On external obligations, Multilateral bodies were paid $214,459,449.33; Bilateral entities $136,474,716.28; and for Commercial papers, $450,428,973.15.

According to the International Monetary Fund (IMF), the Federal Government is expected to spend 82 perc ent of its revenue on interest payments in 2023.

The IMF also stated that external debt, including that of the private sector, is projected to reach $121.6 billion, while external reserves are expected to climb to $37.5 billion.

The IMF’s projections showed a slight improvement in the percentage of government revenue used for interest payments, with interest payment expected to decline from 96.3 per cent in 2022 to 82 per cent in 2023.

The Star