Senate Approves President Tinubu’s ₦1.77trn Loan Request
The Senate has approved the ₦1.77 trillion ($2.2b) loan request of President Bola Tinubu following a voice vote in favor of the request.
The Senate, led by Deputy Senate President Barau Jibrin, approved the loan after presenting a report by the Senate Committee on Local and Foreign Debts, chaired by Senator Wammako Magatarkada (APC, Sokoto North).
The loan request, submitted by the President on Tuesday, is part of a new external borrowing plan to partially address the ₦9.7 trillion budget deficit for the 2024 fiscal year.
On Tuesday, Tinubu wrote to the National Assembly, requesting approval of a fresh N1.767 trillion, the equivalent of $2.209 billion as a new external borrowing plan in the 2024 Appropriation Act.
The fresh loan is expected to stretch the amount spent on debt servicing by the Federal Government. The Central Bank of Nigeria recently said that it cost the Federal Government $3.58 billion to service foreign debt in the first nine months of 2024.
The CBN report on international payment statistics showed that the amount represents a 39.77 percent increase from the $2.56bn spent during the same period in 2023.
According to the report, while the highest monthly debt servicing payment in 2024 occurred in May, amounting to $854.37m, the highest monthly expenditure in 2023 was $641.70m, recorded in July.
The trend in foreign debt servicing by the CBN highlights Nigeria’s rising cost of debt obligations.
Further breakdown of international debt figures showed that in January 2024, debt servicing costs surged by 398.89 percent, rising to $560.52m from $112.35m in January 2023. February, however, saw a slight decline of 1.84 percent, with payments reducing from $288.54m in 2023 to $283.22m in 2024.
March recorded a 31.04 percent drop in payments, falling to $276.17m from $400.47m in the same period last year. April saw a significant rise of 131.77 percent, with $215.20m paid in 2024 compared to $92.85m in 2023.
The highest debt servicing payment was in May 2024, when $854.37m was spent, a 286.52 percent increase compared to $221.05m in May 2023. June, on the other hand, saw a 6.51 percent decline, with $50.82m paid in 2024, down from $54.36m in 2023.
July 2024 recorded a 15.48 percent reduction, with payments dropping to $542.50m from $641.70m in July 2023. In August, there was another decline of 9.69 percent, as $279.95m was paid compared to $309.96m in 2023. However, September 2024 saw a 17.49 percent increase, with payments rising to $515.81m from $439.06m in the same month last year.
