Skip to content

Nigeria Debt Costs Exceed Revenue as Oil Income Slumps

  • Oil earnings were 61% below estimates in four months to April
  • Elevated debt-service costs unlikely to impact credit risk
Giant storage tanks at an oil refinery and fertilizer plant outside of Lagos, Nigeria.

Giant storage tanks at an oil refinery and fertilizer plant outside of Lagos, Nigeria.

Photographer: Tom Saater/Bloomberg
Updated on

Africa’s largest crude producer is unlikely to face a credit-rating downgrade even after the government failed to raise enough revenue to service its debt because of a plunge in oil earnings. 

Government revenue of 1.63 trillion naira ($3.8 billion) in the four months through April was 49% below target mainly due to oil earnings missing forecasts and is less than the 1.94 trillion naira needed to cover debt-service payments, according to a presentation by Finance Minister Zainab Ahmed on the Budget Office’s website. Oil earnings at 1.23 trillion naira were 61% below budget forecasts for the period, the presentation shows.