Finance & EconomyNews

Nigeria Proposes Debt Restructuring as Debt Service Commitments Mount

The Minister of Finance, Zainab Ahmed, stated that Nigeria is considering debt restructuring and extending its credit obligation repayment period as it faces a rising debt-servicing burden. As of April 2022, the country’s debt service at N1.94 trillion surpassed the revenue of N1.63 trillion in the first four months of the year as the country’s revenue dwindled with falling oil production. She also stated that the government plans to refinance domestic debt obligations due this year and next. At the same time, the country’s N20 trillion in outstanding borrowings from the Central Bank would be restructured into government bonds. Analysts believe that the plan for debt restructuring is temporary as the country’s debt profile would continue to increase with its plans to borrow N8.4 trillion to cover the estimated 2023 budget hole. The plan for debt restructuring would likely put pressure on the Eurobond and domestic bond markets, nudging yields upwards.  

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