Nigeria’s foreign debt is expected to rise further to about $51 billion, following President Bola Tinubu’s request to the Senate, seeking approval to borrow additional $7.8 billion and €100million, as part of his 2022-2024 borrowing plan.
Some financial analysts have debunked the official reasons given for the borrowing, claiming it was rather meant as a bridging loan to cushion the country’s current balance of payment crisis.
Nigeria’s foreign debt as at June 2023, was put at $43.2 billion, while domestic debt is put at N54.1 trillion, bringing public debt to N113.4 trillion.
With the presidential request for new borrowing, coupled with the depreciation of the naira, the total public debt is forecast to reach N130 trillion.
The President in a letter addressed to the Senate yesterday, explained that the request was anchored on an approval given by President Muhammadu Buhari-led administration, after a Federal Executive Council, FEC, meeting early in May 2023.
Senate President Godswill Akpabio, read Tinubu’s request during plenary.
Tinubu’s letter reads: “The Senate may wish to note that the past administration approved the 2022 – 2024 borrowing plan at the Federal Executive Council which was held on the 15th day of May 2023.
“The projects cut across all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, security and employment as well as financial management reforms, among others.
“The facility of the projects and programmes under the borrowing plan is $7,864,508,559 dollars and then in Euro 100 million euros respectively.
“The Senate is invited to note that following the removal of fuel subsidy and its impact on the economy in the country, African Development Bank, AfDB, and the World Bank Group, WBG, have indicated interest to assist the country in mitigating the economic shores and recent reforms with a sum of $1 billion and $2 billion respectively, in addition to the Federal Executive Council approved 2022-2024 external borrowing plan.
“Consequently, the required approval is in the sum of $7,864,508,559 dollars and in terms of euro, 1000 million euros.
“I would like to underscore the fact that the projects and programmes borrowing plans were selected based on positive technical economic evaluations as well as the expected contribution to the social economic development of the country, including employment generation, skills acquisitions , supporting the emergence of more entrepreneurs, poverty reduction and food security to improve the livelihood of an average Nigerian.
“The projects and programmes will be implemented in all the 36 states of the federation and the federal capital territory “In view of the present economic realities facing the country, it has become imperative that the resolve to using the external borrowing to breach the financing gap which will be applied to key infrastructure projects including power, railway, health, among others.