A report from the Debt Management Office (DMO) reveals that Naira devaluation increased Nigeria’s external debt by approximately N30.03 trillion between 2023 and June 2024.

The development is especially when considered in naira terms.

Although the country’s debt when measured in US dollars is smaller, the fall of naira has been blamed for an increase in the debt in the local currency.

According to details from the Debt Management Office, as of June 1, 2023, Nigeria’s external debt stood at $43.16bn, PUNCH reports.

Nigeria owes $1.61bn to the IMF, making up 3.75 per cent of the total external debt.

The World Bank’s share of Nigeria’s debt totals $16.32bn, with the majority owed to the International Development Association, which accounts for $16.32bn, which represents 38 per cent of Nigeria’s total external debt.

At an exchange rate of N770.38 to the dollar, this amounted to N33.25tn.

However, by June 1, 2024, the naira had depreciated by 47.6 per cent, with the exchange rate rising to N1,470.19 to the dollar.

The reported noted that due to this,  Nigeria’s external debt, which has dropped to $42.90bn, is now equivalent to N63.07tn.

In dollar terms, Nigeria’s external debt dropped by 0.60 per cent or $258.18m between June 2023 and the same month of 2024.

Despite the fall in dollar terms, the country recorded an increase in naira terms, with an of  89.7 per cent or N29.82tn within the same period.

It was further noted that in  June 2023 exchange rate (N770.38/$1) had been used, Nigeria’s external debt would have been N33.05tn.

This further shows that the naira devaluation added N30.02tn to Nigeria’s external debt in one year as the country battles currency weakness and rising total debt.

It was also stated that while the face value of Nigeria’s external debt in dollar terms has remained relatively stable, the depreciation of the local currency has caused a steep rise in the naira equivalent.

As of June 2024, external debt of the country accounted for 46.96 per cent of Nigeria’s total debt by June 2024, up from 38.05 per cent recorded in the same month last year.