Nigeria’s President, Bola Ahmed Tinubu, has requested the Senate’s approval for a new external loan of N1.767 trillion to help address the country’s growing budget deficit.
This request was presented by House Speaker Tajudeen Abbass during Tuesday’s plenary session. If approved, the loan will partly fund the N9.7 trillion deficit in the 2024 federal budget.
Alongside the borrowing request, President Tinubu also submitted the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2025–2027 to the National Assembly. Additionally, the National Social Investment Programme Amendment Bill was forwarded, aiming to formalize the social register as the central tool for implementing federal social welfare programs.
Last Thursday, the Federal Executive Council (FEC) greenlit a $2.2 billion external borrowing plan as part of the Federal Government’s financing strategy for the 2024 Appropriation Act.
With this additional loan request, Nigeria’s external debt is projected to hit $45.1 billion by the end of 2024.
Recent data from the Central Bank of Nigeria (CBN) reveals that the Federal Government spent $3.58 billion on foreign debt servicing in the first nine months of 2024. This marks a 39.77% increase compared to the $2.56 billion spent during the same period in 2023.
May 2024 recorded the highest monthly debt servicing cost at $854.37 million.In contrast, the peak monthly expenditure in 2023 was $641.70 million in July.
The external debt owed by states and the Federal Capital Territory (FCT) also increased from $4.61 billion to $4.89 billion during the review period.
As the country grapples with a rising debt profile, the latest borrowing request highlights the Federal Government’s reliance on external financing to manage fiscal challenges. However, critics are raising concerns about the sustainability of the increasing debt burden amid ongoing economic struggles.
