Tinubu Asks Senate to Approve Fresh ₦‎1.767 Trillion External Loan

President Tinubu has in a letter addressed to the National on Tuesday requested the Approval of a fresh N1.767 trillion as a new external borrowing plan in the 2024 appropriation act.

Tinubu explained in his request that the loan is based on an exchange rate of N800 to $1 adding that the request was part of Nigeria’s budgetary financing plan that is aimed at addressing a portion of the ₦9.17 trillion fiscal deficit in the 2024 budget.

Tinubu’s request was read by the Senate President Godswill Akpabio.

Accordingly, if approved, the loan will be used to part-finance the budget deficit of N9.7 trillion for the 2024 budget. Tinubu also added that the amount of $2.209 billion (N1.767 trillion) will be raised through Eurobonds or other external borrowing instruments.

The letter also provided detailed terms and conditions for the issuance of Eurobonds in the international capital market to raise the required sum. 

The president has also submitted the MTEF/FSP 2025-2027 to the Senate and the National Social Investment Programme establishment amendment bill to make the social register the primary tool for the implementation of the federal government’s social welfare programmes.

Last Thursday, the Federal Executive Council, FEC, approved a $2.2 billion external borrowing plan as part of the Federal Government’s 2024 Appropriation Act financing program.

The implication of Tinubu’s request to obtain an additional $2.2 billion fresh borrowing plan means that Nigeria’s external debt may increase to $45.1 billion by the end of 2024.

The MTEF/FSP request, which seeks expeditious passage, was referred to the Senator Sani Musa, APC, Niger East-led Senate Committees on Finance and National and Economic Planning to report back as soon as practicable.

This is as the Central Bank of Nigeria recently said the Federal Government spent $3.58 billion servicing the country’s foreign debt in the first nine months of 2024.

CBN’s data on international payment statistics showed that the amount represents a 39.77 per cent increase from the $2.56 billion 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.

External debt for the states and the Federal Capital Territory also climbed from $4.61bn to $4.89bn within the period under review.

The letter also provided detailed terms and conditions for the issuance of Eurobonds in the international capital market to raise the required sum. 

Accordingly, Tinubu directed the Honourable Minister of Finance and Coordinating Minister of the Economy, alongside the DMO, to take all necessary steps to execute the plan upon National Assembly approval.

In another letter, the President asked the Senate for an Amendment to the National Social Investment Agency Act to make the social register the main source of data for all investment programmes.