American rating agency, Fitch, reveals how Nigeria will use on debt servicing in 2025

• A US-based recognition standing agency, Fitch, has enactment Nigeria’s outer indebtedness servicing astatine $5.2 cardinal successful 2025
• The institution disclosed that Nigeria’s indebtedness servicing volition summation from $4.7 cardinal successful 2024 to $5.2 cardinal successful 2025
• It warned that high-interest costs, anemic revenue, and constricted fiscal abstraction are important concerns.

Legit.ng’s Pascal Oparada has reported connected tech, energy, stocks, concern and the economy for implicit a decade.

Fitch Ratings, the American recognition standing agency, has projected that Nigeria whitethorn walk astir $5.2 cardinal connected indebtedness work this year.

The bureau stated this successful its caller standing commentary connected Nigeria, wherever it upgraded Nigeria's long-term overseas currency issuer default standing to B from B-, with a unchangeable outlook.

Fitch Ratings projects that President Tinubu's authorities whitethorn walk implicit $5 cardinal connected outer indebtedness service. Credit: State House
Source: Getty Images

Fitch projects caller outer indebtedness service

It said the government’s outer indebtedness volition emergence from $4.7 cardinal successful 2024 to $5.2 cardinal this year.

Fitch stated that the government's outer indebtedness work is mean but volition emergence to $5.2 cardinal successful 2025 from $4.7 cardinal successful 2024, and autumn to $3.5 cardinal successful 2026. 

The recognition standing steadfast besides disclosed a hold successful the Eurobond coupon outgo owed connected March 28, 2025, which shows persistent challenges successful nationalist concern management.

Fitch warned that precocious involvement costs, anemic revenue, and constricted fiscal abstraction are important concerns.

It stated that wide authorities indebtedness was expected to beryllium astatine astir 51% of DP successful 2025 and 2026.

It, however, expressed interest implicit the government’s gross position, saying that involvement outgo whitethorn devour a ample information of income.

Fitch commends Nigeria’s reserves position

According to reports, Fitch expects revenue-to-GDP to emergence but whitethorn stay low, accounting for a precocious wide authorities interest/revenue ratio, supra 30%, with a national government/revenue ratio of astir 50%.

The standing bureau disclosed that Nigeria’s gross reserves accrued to $41 cardinal astatine the extremity of 2024, earlier declining to $38 cardinal owed to indebtedness work payments.

Punch reports that Fitch expects Nigeria’s reserves to deed 5 months of existent outer payments implicit the mean term.

The institution added that caller argumentation reforms person caused an summation successful overseas speech inflows and monetary stability, with ostentation predicted to beryllium astatine 22% successful 2025.

“Net authoritative FX inflows done the CBN and autonomous sources roseate by astir 89 per cent successful Q4 2024. We expect continued formalisation of FX enactment to enactment the speech rate, though we expect humble depreciation successful the abbreviated term,” Fitch said.

Fitch commended the Nigerian government’s committedness to economical reforms including subsidy removal, liberalising speech rates and monetary argumentation tightening.

The ratings institution noted that the policies improved credibility and boosted Nigeria’s quality to sorb shocks.

FG services indebtedness with $.47 billion

It, however, warned that risks to Nigeria’s outer and fiscal presumption remain, particularly if lipid prices driblet oregon argumentation implementation slows.

Legit.ng earlier reported that Nigeria serviced outer debt with astir $5.47 cardinal betwixt January 2025 and February 2025.

Additionally, Nigeria spent astir N13.12 trillion connected indebtedness servicing successful 2024, a whopping 68% summation from N7.8 trillion recorded successful the erstwhile years.

Nigeria's indebtedness grows nether President Bola Tinubu arsenic Fitch raises alarm connected immense indebtedness servicing. Credit: State House.
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Data from the Debt Management Office (DMO) shows that indebtedness servicing costs successful 2024 exceeded the budgeted N12.3 trillion for 2024.

Nigeria’s indebtedness hits historical high

Legit.ng antecedently reported that arsenic Africa's astir populous state continues to trust connected borrowing to conscionable its fiscal obligations, Nigeria's full nationalist indebtedness deed its highest level ever.

According to information released connected Friday, April 4, by the Debt Management Office (DMO), the country's indebtedness illustration accrued to N144.6 trillion astatine the extremity of 2024 from N97.3 trillion the twelvemonth before.

Nigeria's debt, however, decreased successful dollar terms, going from $108.2 cardinal successful 2023 to $94.2 cardinal past year, indicating reduced volatility successful the overseas currency market

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Source: Legit.ng