THE Nigerian Senate, on Thursday, November 21, approved a $2.2 billion (equivalent to N1.7 trillion) loan request by President Bola Tinubu.
The Red Chamber approved the loan request following consideration of the report from the senate committees on local and foreign debt.
In a report to the Senate, Aliyu Wamakko, the committee on local and foreign debts chairman, explained that the funds would be raised through instruments like Eurobonds and Sukuk.
The ICIR reported on Tuesday, November 19, that Tinubu sought the National Assembly’s approval for a fresh N1.767 trillion as a new external borrowing plan in the 2024 Appropriation Act.
The President’s letter containing the request noted that the loan would be used to part-finance the budget deficit of N9.7 trillion.
The loan request, however, raised further questions as the Central Bank of Nigeria (CBN) recently said the Federal Government spent $3.58 billion servicing the country’s foreign debt in the first nine months of 2024.
Data sourced from the (CBN) report 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 $854.37 million, the highest monthly expenditure in 2023 was $641.70 million, recorded in July.
The trend in international 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 per cent, rising to $ 560.52 million from $ 112.35 million in January 2023. February, however, saw a slight decline of 1.84 per cent, with payments reducing from $288.54 million in 2023 to $283.22 million in 2024.
March recorded a 31.04 per cent drop in payments, falling to $276.17 million from $400.47 million in the same period last year. April saw a significant rise of 131.77 per cent, with $215.20 million paid in 2024 compared to $92.85m in 2023.
The highest debt servicing payment occurred in May 2024, when $ 854.37 million was spent, reflecting a 286.52 per cent increase compared to $ 221.05 million in May 2023. June, on the other hand, saw a 6.51 per cent decline, with $50.82 million paid in 2024, down from $ 54.36 million in 2023.
July 2024 recorded a 15.48 per cent reduction, with payments dropping to $542.50 million from $641.70 million in July 2023.
In August, there was another decline of 9.69 per cent, as $279.95 million was paid compared to $309.96 million in 2023.
However, September 2024 saw a 17.49 per cent increase, with payments rising to $515.81 million from $439.06 million in the same month last year.
Given rising exchange rates, the data raises concerns about the growing pressure of Nigeria’s foreign debt obligations.
Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: umustapha@icirnigeria.com. He tweets @UsmanMustapha_M