Nigeria’s president seeks Senate approval to borrow $8 billion

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Nigeria’s president seeks Senate approval to borrow $8 billion

7:27 CAT | 02 Nov 2023

FILE - Nigerian President Bola Tinubu arrives for the closing session of the New Global Financial Pact Summit, Friday, June 23, 2023 in Paris, France. [File photo: Lewis Joly/Pool via Reuters]

Nigerian President Bola Tinubu on Wednesday asked the Senate to approve nearly $8 billion in new debt as part of a 2022-24 external borrowing plan to finance infrastructure, health, education and security.

Nigeria, Africa’s biggest economy and top oil producer, has been relying increasingly on debt due to lower tax collections and lower oil exports, its biggest foreign currency earner.

In a letter to the Senate, Tinubu requested $7.86 billion and 100 million euros ($105.40 million) but did not say where the money would come from.

Nigeria has raised money in international credit markets, including through eurobonds, and borrowed from lenders like the World Bank and African Development Bank for budget support.

“In view of the present economic realities facing the country, it has become imperative to use the external borrowing to bridge the financing gap which will be applied to key infrastructure projects including power, railway, health among others,” said Tinubu.

The government has said it wants to encourage investments rather than rely on borrowing to create jobs and build infrastructure.

The Senate and House of Assembly are considering a supplementary budget of 2.176 trillion naira ($2.8 billion) to fund “urgent issues” including defence and security.

Nigeria’s cabinet two weeks ago approved 26.01 trillion naira ($34 billion) for next year’s budget, of which about a third is earmarked for interest payments.

Some 40% of Nigeria’s total debt is external.

Source: Reuters