President Bola Tinubu has formally requested the National Assembly’s approval for a new external borrowing plan totaling N1.767 trillion. The funds are intended to address the N9.7 trillion deficit in the 2024 appropriation act.
The request was presented during a plenary session and included the president’s submission of the 2025-2027 Medium-Term Expenditure Framework (MTEF) and the National Social Investment Programme (NSIP) amendment bill. The proposed amendment seeks to prioritize the social register for implementing federal welfare programs.
Rising Debt Obligations
This development comes amid rising concerns over Nigeria’s external debt servicing costs. The Central Bank of Nigeria (CBN) recently revealed that $3.58 billion was spent on foreign debt servicing in the first nine months of 2024, marking a 39.77% increase** from the $2.56 billion recorded during the same period in 2023.
Key highlights from the CBN’s report include:
– Highest monthly payment in 2024: $854.37 million in May, up from $221.05 million in May 2023.
– A notable 398.89% increase in January payments compared to the previous year.
Broader Fiscal Challenges
Further reports show that the total debt for Nigeria’s 36 states rose to N11.47 trillion as of mid-2024, reflecting challenges in managing fiscal sustainability. States remain heavily reliant on Federation Account Allocation Committee (FAAC) disbursements, with some depending on FAAC for over 70% of their total revenue.
This latest borrowing request underscores Nigeria’s ongoing fiscal and economic challenges, exacerbated by currency devaluation and reliance on oil revenues.
