Nigeria’s President Bola Tinubu has formally requested the National Assembly’s approval for a new external borrowing plan amounting to N1.767 trillion. The proposed loan is part of the 2024 appropriation act and is based on an exchange rate of N800 to $1. This request was presented to the House of Representatives during a Tuesday plenary session by Speaker Tajudeen Abbas.
If granted, the loan will be used to address the 2024 budget deficit, currently projected at N9.7 trillion. The move comes as Nigeria continues to grapple with economic challenges and aims to stabilize its fiscal situation through increased external funding.
In addition to the new borrowing plan, President Tinubu has also submitted the Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025-2027 to the National Assembly. Furthermore, he has put forward an amendment to the National Social Investment Programme, proposing that the existing social register becomes the primary database for all federal government social welfare initiatives.
The push for fresh borrowing follows last week’s decision by the Federal Executive Council (FEC) to approve a $2.2 billion external loan, which is a key component of the Federal Government’s financing strategy for the 2024 Appropriation Act. If the additional borrowing is approved, Nigeria’s external debt could rise to an estimated $45.1 billion by the end of 2024.
Meanwhile, recent data from the Central Bank of Nigeria (CBN) highlights the increasing financial burden of foreign debt. In the first nine months of 2024, the federal government spent $3.58 billion on servicing international debts, reflecting a 39.77% increase compared to the $2.56 billion expended during the same period in 2023. According to the CBN report, the peak monthly debt servicing in 2024 occurred in May, with payments amounting to $854.37 million, while the highest monthly outlay in 2023 was $641.70 million, recorded in July.
The burden of debt has also extended to Nigeria’s states and the Federal Capital Territory (FCT), with external debt levels increasing from $4.61 billion to $4.89 billion within the same review period.
In a related development, President Tinubu has requested an amendment to the National Social Investment Agency Act. The proposed change seeks to establish the social register as the primary source of data for all federal social investment programs, ensuring a standardized approach to the delivery of social welfare benefits across the country.
