Foreign Debt to Exceed $51 Billion as Tinubu Pursues Additional $7.8 Billion, €100 Million Loans

President Bola Tinubu has requested the Senate to approve his 2022-2024 borrowing plan, which includes $7.8 billion and €100 million in foreign loans, to finance various projects and programmes across the country. The request was contained in a letter read by Senate President Godswill Akpabio during plenary yesterday.

According to the letter, the borrowing plan was approved by the previous administration of President Muhammadu Buhari, after a Federal Executive Council meeting in May 2023. The letter stated that the projects and programmes covered sectors such as infrastructure, agriculture, health, education, water supply, security and employment, among others.

The letter also revealed that the African Development Bank and the World Bank Group have indicated interest to assist Nigeria in mitigating the economic shocks and reforms with $1 billion and $2 billion respectively, in addition to the borrowing plan.

The President emphasized that the projects and programmes were selected based on positive technical and economic evaluations, as well as their expected contribution to the socio-economic development of the country, including employment generation, skills acquisition, poverty reduction and food security.

He added that the projects and programmes would be implemented in all the 36 states of the federation and the federal capital territory. He further explained that the external borrowing was necessary to bridge the financing gap and to fund key infrastructure projects such as power, railway and health.

He urged the Senate to consider and approve the 2022-2024 external borrowing plan to enable the government deliver its responsibilities to Nigerians through expeditious disbursement and efficient project implementation.

Meanwhile, Nigeria’s foreign debt is projected to rise to about $51 billion, following the President’s request for new borrowing, coupled with the depreciation of the naira. Nigeria’s foreign debt as at June 2023 was $43.2 billion, while domestic debt was N54.1 trillion, bringing public debt to N113.4 trillion.

With the new borrowing request and exchange rate fluctuations, the total public debt is forecast to reach N130 trillion.

World Bank commits $11 billion to Nigeria in three years

In another development, the World Bank Country Director for Nigeria, Shubham Chaudhuri, said yesterday that the bank has committed over $11 billion in the past three years to Nigeria’s governments at both the federal and sub-national levels.

Chaudhuri stated this while giving his goodwill message at the opening of a three-day cabinet retreat for ministers, presidential aides, permanent secretaries and top government functionaries, at the State House Conference Centre, Abuja.

Chaudhuri assured Tinubu of the bank’s support in his administration’s challenging task of lifting millions of Nigerians out of poverty and making lives better for everyone.

He said Nigeria is at a critical juncture to either continue muddling through business as usual with the risk of things falling apart or have a bold vision and take decisive actions to transform the country’s economy and society.

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