Tinubu seeks National Assembly approval for new N1.77 trillion loan

President Bola Tinubu has requested approval from the National Assembly to borrow N1.767 trillion to help fund Nigeria’s 2024 budget.

If approved, the loan will contribute to covering the N9.7 trillion budget deficit. The House Speaker read the request on Tuesday.

The request comes amid growing concerns over Nigeria’s rising debt and the increasing cost of servicing it.

In the first nine months of 2024, the federal government spent $3.58 billion on foreign debt servicing, a 39.77% increase from the $2.56 billion spent in the same period last year, according to the Central Bank of Nigeria.

Debt servicing costs have been rising throughout the year:

• January saw a sharp rise of 398.89%, reaching $560.52 million from $112.35 million in January 2023.
• February saw a slight drop of 1.84%.
• March had a 31.04% decrease.
• April recorded a significant increase of 131.77%.
• May had the highest payment, $854.37 million, a 286.52% jump from May 2023.
• June saw a small decline of 6.51%.
• July and August had reductions of 15.48% and 9.69%, respectively.
• September showed a 17.49% rise.

Meanwhile, the Debt Management Office reported that the total debt of Nigeria’s 36 states reached N11.47 trillion by June 2024, up 14.57% from N10.01 trillion in December 2023.

External debt for the states and the Federal Capital Territory increased from $4.61 billion to $4.89 billion. The increase was driven by the naira’s devaluation, which raised debt in naira terms by 73.46%, from N4.15 trillion to N7.2 trillion.

Despite these increases, domestic debt for the states and the FCT fell from N5.86 trillion to N4.27 trillion. As of June 2024, the states and FCT’s share of Nigeria’s total public debt stood at N134.3 trillion, down from 10.29% in December 2023.