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Tinubu Seeks Senate Approval for ₦1.767 Trillion External Loan to Fund 2024 Budget

Published by Tope Fakinlede on November 19th, 2024.

Tinubu Seeks Senate Approval for ₦1.767 Trillion External Loan to Fund 2024 Budget

Bola Ahmed Tinubu

President Bola Tinubu has formally requested the National Assembly’s approval for a new external loan of ₦1.767 trillion, as part of the 2024 fiscal year’s borrowing plan. The proposed loan, which is based on an exchange rate of ₦800 to $1, is intended to help bridge the N9.7 trillion budget deficit for the upcoming year.

The request was presented by House Speaker Tajudeen Abbass during Tuesday’s plenary session. If granted, the loan will contribute to financing the nation’s budget shortfall.

In addition to the loan request, President Tinubu has submitted the Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for 2025-2027 to the legislature, along with a bill to amend the National Social Investment Programme (NSIP) Act. The proposed amendment seeks to make the social register the primary tool for implementing the federal government’s social welfare initiatives.

This request follows the Federal Executive Council’s approval last week of a $2.2 billion external borrowing plan to support the 2024 Appropriation Act. With the combined borrowing plans, Nigeria’s external debt is projected to reach $45.1 billion by the close of 2024.

Meanwhile, data from the Central Bank of Nigeria (CBN) shows that Nigeria spent $3.58 billion servicing its foreign debt during the first nine months of 2024, marking a 39.77% increase compared to the $2.56 billion spent in the same period of 2023. The highest monthly debt servicing cost in 2024 occurred in May, amounting to $854.37 million, surpassing last year’s peak of $641.70 million in July.

Additionally, Nigeria’s external debt obligations for the states and the Federal Capital Territory rose from $4.61 billion to $4.89 billion over the same period. In a separate letter, the President also requested the Senate to amend the National Social Investment Agency Act to prioritize the social register as the central data source for all investment programs.