The Senate has granted approval to the N1.77 trillion ($2.2 billion) loan request of President Bola Tinubu.
This was done after a voice vote in favour of the request at plenary on Thursday.
The Red Chamber’s session presided over by Deputy Senate President, Mr Barau Jibrin, approved the loan after the Senate Committee on Local and Foreign Debts chaired by Senator Wammako Magatarkada (APC, Sokoto North) presented the report of the committee.
The request which was submitted by the President on Tuesday is part of a fresh external borrowing plan to partially finance the N9.7 trillion budget deficit for the 2024 fiscal year.
President Tinubu had on Tuesday written to the National Assembly, seeking approval of a fresh N1.767 trillion, the equivalent of $2.209 billion as a new external borrowing plan in the 2024 Appropriation Act.
Investors King reports that the funding will be raised via Eurobonds and Sukuk.
The fresh loan is expected to stretch the amount spent on debt servicing by the federal government.
The Central Bank of Nigeria recently said that it cost the Federal Government $3.58 billion to service foreign debt in the first nine months of 2024.
The CBN report on international payment statistics showed that the amount represents a 39.8 percent increase from the $2.56 billion spent during the same period in 2023.
According to the report, while the highest monthly debt servicing payment in 2024 occurred in May, amounting to $854.37 million, the highest monthly expenditure in 2023 was $641.70 million, recorded in July.
The trend in foreign debt servicing by the CBN highlights the rising cost of debt obligations by Nigeria.
Further breakdown of international debt figures showed that in January 2024, debt servicing costs surged by 398.9 percent, rising to $560.52 million from $112.35 million in January 2023. February, however, saw a slight decline of 1.8 percent, with payments reducing from $288.54 million in 2023 to $283.22 million in 2024.
March recorded a 31.0 percent drop in payments, falling to $276.17 million from $400.47 million in the same period last year. April saw a significant rise of 131.8 percent, with $215.20 million paid in 2024 compared to $92.85 million in 2023.
The highest debt servicing payment occurred in May 2024, when $854.37 million was spent, reflecting a 286.5 percent increase compared to $221.05 million in May 2023. June, on the other hand, saw a 6.51 percent decline, with $50.82 million paid in 2024, down from $54.36 million in 2023.
July 2024 recorded a 15.48 percent reduction, with payments dropping to $542.50 million from $641.70 million in July 2023. In August, there was another decline of 97 percent, as $279.95 million was paid compared to $309.96 million in 2023.
However, September 2024 saw a 17.5 percent increase, with payments rising to $515.81 million from $439.06 million in the same month last year.
