- Experts have said Nigeria is very close to seeking a bailout from the International Monetary Fund to avoid debt-servicing default
- Sources said that as the country struggles to meet its obligations, the best bet is to seek IMF cover and get international creditors to reschedule the debts
- As the country’s oil production declines, it is becoming challenging meeting up with debt obligations, and petrol subsidies seem to be worsening things for Nigeria
Nigeria is inching towards opening talks and asking the International Monetary Fund (IMF) to pave the way for debt rescheduling of the country’s humongous debt and avoid a looming default, BusinessDay said, quoting economists monitoring the situation.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, said that the country is already spending more on debt servicing and finding it very hard to fund petrol subsidies as oil prices fluctuate.
Nigeria struggling crude oil production, petrol subsidy
Nigeria issued a $2.2 billion Eurobond in March to allow the Nigeria National Petroleum Company Limited (NNPC) to pay for the import of petrol which the country subsidises at N18.5 billion every day, and the country is finding it challenging to find forex funds for the imports.
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Reports says crude oil production in Nigeria has dipped to 1.2 million barrels daily, with almost one million from deep-water oil fields controlled by production-sharing contracts. It means the federal government cannot finance the fuel imports, which the NNPC puts at 60 million litres daily.
Bismarck Remane told BusinessDay that the best bet for Nigeria to avoid looming debt servicing default is to seek IMF cover.
He said it is necessary to reschedule all maturing obligations towards economic recovery for Nigeria.
Debt Stock: Nigeria's most indebted geopolitical zones in 2022
Legit.ng reported that according to data from the Debt Management Office (DMO), Nigeria's total debt stock has hit over N41 trillion as of March 2021.
The breakdown of the debt, tabulated by Legit.ng shows that the various states in Nigeria contribute immensely to the national debt stock.
According to reports, Nigeria's total public debt stock rose from N39.56 trillion in December 2021 to N41.60 trillion, $100.07 billion in the first three months of 2022, January to March, the Debt Management Office (DMO) revealed yesterday.