President Bola Tinubu has written to the National Assembly requesting for approval for a new external borrowing plan of ₦1.767 trillion to partially fund the ₦9.7 trillion budget deficit in the 2024 appropriation act.This is despite the growing pressures of Nigeria’s external debt.
The president’s request was read during plenary on Tuesday by the Speaker of the House of Representatives. If approved, the loan is meant to contribute to financing the federal government’s economic and developmental priorities in the upcoming fiscal year.
In addition to the borrowing plan, Tinubu also forwarded the Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025-2027 to the National Assembly. These documents provide the fiscal roadmap for the administration’s long-term economic objectives.
The president further submitted the National Social Investment Programme Establishment Amendment Bill to parliament.
The Central Bank of Nigeria had recently reported that the Federal Government spent $3.58 billion servicing the country’s foreign debt in the first nine months of 2024.
Data sourced from the Central Bank of Nigeria (CBN) report on international payment statistics showed that the amount represents a 39.77 per cent 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 international debt servicing by the CBN highlights the rising cost of debt obligations by Nigeria.
Further breakdown of international debt figures showed that in January 2024, debt servicing costs surged by 398.89 per cent, rising to $560.52m from $112.35m in January 2023. February, however, saw a slight decline of 1.84 per cent, with payments reducing from $288.54m in 2023 to $283.22m in 2024.
March recorded a 31.04 per cent drop in payments, falling to $276.17m from $400.47m in the same period last year. April saw a significant rise of 131.77 per cent, with $215.20m paid in 2024 compared to $92.85m in 2023.
The highest debt servicing payment occurred in May 2024, when $854.37m was spent, reflecting a 286.52 per cent increase compared to $221.05m in May 2023. June, on the other hand, saw a 6.51 per cent decline, with $50.82m paid in 2024, down from $54.36m in 2023.
July 2024 recorded a 15.48 per cent reduction, with payments dropping to $542.50m from $641.70m in July 2023. In August, there was another decline of 9.69 per cent, as $279.95m was paid compared to $309.96m in 2023. However, September 2024 saw a 17.49 per cent increase, with payments rising to $515.81m from $439.06m in the same month.
Nigeria’s growing debt servicing continues to be worrisome for the country. This is as even with Fuel Subsidy removal, Nigeria still considers external borrowing to service its debt.
