Nigerian President Bola Tinubu has requested the Senate’s approval for an approximately $8 billion external borrowing plan covering the years 2022-2024. This financial initiative aims to support various sectors, including infrastructure, health, education, and security, in Nigeria, which is Africa’s largest economy and leading oil producer. Nigeria’s increased reliance on debt is attributed to reduced tax revenues and lower oil exports, which represent a significant source of foreign currency. In his letter to the Senate, Tinubu sought $7.86 billion and 100 million euros ($105.40 million) without specifying the funding sources.Thank you for reading this post, don't forget to subscribe!
Nigeria has previously accessed international credit markets, issued eurobonds, and received loans from institutions like the World Bank and African Development Bank to support its budget. Tinubu emphasized the necessity of external borrowing to address the country’s economic challenges and fund vital projects, including power, railway, and healthcare.
The government’s policy objective is to shift towards promoting investments as a means of job creation and infrastructure development rather than solely relying on borrowing. The Senate and House of Assembly are presently deliberating on a supplementary budget of 2.176 trillion naira ($2.8 billion) to address pressing matters, such as defense and security. Furthermore, Nigeria’s cabinet recently approved a budget of 26.01 trillion naira ($34 billion) for the upcoming year, with a significant portion earmarked for interest payments.