Nigeria to Borrow $4 Billion, Seeks Lawmakers Consent
President Muhammadu Buhari

After the lawmakers approved $6.18 billion foreign currency loans, Nigerian President, Muhammadu Buhari, has again applied to the National assembly to borrow an additional sum of $4 billion, and EUR 710 million from foreign markets.

The approval sought is contained in a letter addressed to the Nigerian Senate (NASS) and read at the plenary session on Tuesday. The total sum seeks based on today’s euro to dollar exchange amount to $4.84 billion.

The president said in the letter that the new borrowing was an addendum to an earlier approved plan to incorporate critical projects for the medium-term.

He explained that projects to be funded cut across health, agriculture, food security, energy, and education and COVID-19 response efforts.

 “I write on the above subject and submit the attached addendum to the proposed 2018-2020 external rolling borrowing plan for the consideration and concurrent approval of the senate for the same to become effective.

“The distinguished Senate President may recall that I submitted a request on the 2018-2020 borrowing plan for the approval of the senate in May 2021.

“However, in view of other emerging needs and to ensure that all critical projects approved by Federal Executive Council as of June 2021 are incorporated, I hereby forward an addendum to the proposed borrowing plan.

“The projects listed in the external borrowing plan are to be financed through sovereign loans from the World Bank, French Development Agency, EXIM Bank and IFAD in the total sum of $4,054,476,863 and €710 million and grant components of $125 million,” the letter read.

If approved, Nigeria’s total public debt which printed at N33.107 trillion in March 2021 would increase by more than $10 billion in less than 12-months amidst weak foreign investment inflow and dollar shortage.

That would mean a more than N4 trillion borrowing made in the second half of 2021 amidst plan to invest in capital projects and financing budget deficit due to fiscal slippage.

Some Broadstreet analysts had projected earlier in the year that total public debt could be heading to N40 trillion, though less than 40% of Nigeria’s gross domestic product and weight favourable comp

Debt Management Office analysis of the Public Debt Stock, shows that the increase was in the Domestic Debt Stock which grew by 2.11% from N20.21 trillion in December 2020 to N20.637 trillion as of March 31, 2021.

The FGN’s share of the Domestic Debt includes FGN Bonds, Sukuk and Green Bonds used to finance infrastructure and other capital projects as well as the N940.220 billion Promissory Notes.

External debt stock declined from US$33.348 billion as of December 31, 2020 to US$32.86 billion due to the redemption by Nigeria of the USD500 million Eurobond in January 2021.

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Nigeria to Borrow $4 Billion, Seeks Lawmakers Consent