KEY POINTS

• Tinubu requests ₦1.7 trillion external loan to finance the 2024 deficit.
• Nigeria’s debt servicing costs climbed by 39.77 percent in 2024.
• Proposed social register amendments aim to streamline welfare programs.

President Bola Tinubu has formally asked the National Assembly to approve a ₦1.767 trillion external loan to address a substantial portion of Nigeria’s ₦9.17 trillion budget deficit for 2024.

The proposed loan, equivalent to $2.2 billion at an exchange rate of ₦800 to $1, is to be sourced through Eurobonds or other external borrowing instruments.

The Senate, led by President Godswill Akpabio, read Tinubu’s request during a recent plenary session. If approved, Nigeria’s external debt could increase to $45.1 billion by the end of 2024.

The Federal Executive Council (FEC) had previously endorsed the plan as part of the 2024 Appropriation Act financing program.

According to a report by The Sun, Tinubu also submitted the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2025-2027 to the Senate, urging expeditious passage.

The Senate referred the documents to the Committees on Finance and National Economic Planning, chaired by Senator Sani Musa, for detailed review.

Borrowing plan amid rising debt servicing costs

The request highlights Nigeria’s ongoing struggle with debt servicing and fiscal sustainability.

According to the Central Bank of Nigeria (CBN), the government spent $3.58 billion servicing foreign debt in the first nine months of 2024, a 39.77 percent increase from $2.56 billion during the same period in 2023.

In May alone, debt servicing peaked at $854.37 million, reflecting growing fiscal pressure.

Tinubu’s letter included terms for issuing Eurobonds to finance the loan. The president directed the Minister of Finance and the Debt Management Office (DMO) to take necessary steps for implementation upon legislative approval.

Additionally, Tinubu proposed amendments to the National Social Investment Agency Act. The revisions aim to make the social register the primary tool for delivering welfare programs, ensuring efficient management of federal social investments.