Following the Senate’s vote yesterday to approve the $16.23 billion and €1.02 billion loans requested by President Muhammadu Buhari, the country’s public debt is expected to grow to N44.5 trillion.
When fully implemented, the Senate-approved foreign borrowings, along with the $4 billion Eurobond loans, will raise the external loan component of the national debt to $54.87 billion, up from $33.47 billion at the end of June this year.
As a result of this outcome, the overall national debt will rise to N44.51 trillion from N35.47 trillion at the end of June.
In September, the President requested the new foreign loans in an update to the borrowing plan for 2018-2020.
The National Assembly authorized initial loan requests in the 2018-2020 borrowing plan totaling $8.3 billion and €490 million in July.
Clifford Ordia, head of the Senate Committee on Local and Foreign Debts, said the projects for which money were requested in the 2018-2020 borrowing plan are still underway while submitting a report yesterday.
The initiatives, according to Ordia, will spur a “rebirth of commercial and engineering operations,” with increased tax revenues payable to the government as a result of these productive activities.
“It will be recalled that the Senate at plenary in July 2021 approved financing for projects as recommended by the committee above, while the committee continued further legislative action and consideration of the outstanding request.
“Subsequently, on September 15, 2021, the President of the Senate of the Federal Republic of Nigeria read another communication from the President and Commander-in-Chief of the Armed Forces, containing an addendum to the 2018-2020 External Borrowing (Rolling) Plan in the sum of $4,054,476,863, €710,000,000 and Grant Component of $125,000,000 for various projects and same was also referred to the committee for further legislative action.
“The committee notes that a good number of the projects in respect of which financing is being requested under the 2018-2020 external borrowing (rolling) plan are mostly ongoing projects and programmes in respect of which external borrowed funds have been spent in the past, including loans and grants.
“The committee found as a fact that out of a sum of over $22.8billion approved by the National Assembly under the 2016-2018 external borrowing rolling plan, only $2.8billion, that is 10%, has been disbursed to Nigeria.
“The committee observes that these projects, some of which require additional financing, will have a great multiplier effect on stimulating economic growth through infrastructure development, job creation, poverty alleviation, health care and improve our security architecture.”
Among the funding agencies are the World Bank, the African Development Bank, and the French Development Agency, AFD.
