The Senate has approved President Bola Tinubu’s request for a ₦1.77 trillion ($2.2 billion) loan following a voice vote. The approval was granted during a session presided over by Deputy Senate President Barau Jibrin, after the Senate Committee on Local and Foreign Debts, chaired by Senator Wammako Magatarkada (APC, Sokoto North), presented its report.

The loan request, submitted by the President earlier in the week, is part of a new external borrowing plan aimed at partially covering the ₦9.7 trillion budget deficit projected for the 2024 fiscal year. Tinubu’s letter to the National Assembly sought approval for this borrowing under the 2024 Appropriation Act.

This additional loan is expected to further increase the Federal Government’s debt servicing costs. Recent data from the Central Bank of Nigeria (CBN) revealed that $3.58 billion was spent on servicing foreign debt in the first nine months of 2024, a 39.77% rise compared to $2.56 billion during the same period in 2023.

The CBN’s international payment statistics highlight the escalating cost of Nigeria’s debt obligations. For instance, debt servicing payments in January 2024 surged by 398.89% to $560.52 million, compared to $112.35 million in January 2023. Similarly, May 2024 recorded the highest monthly payment of $854.37 million, a 286.52% increase from $221.05 million in May 2023.

Conversely, some months saw slight declines. February 2024 recorded a 1.84% decrease in debt servicing costs, while June 2024 saw a 6.51% drop. However, September 2024 recorded a 17.49% increase, with payments rising to $515.81 million from $439.06 million the previous year.

This trend underscores the growing pressure of Nigeria’s foreign debt obligations, further exacerbated by rising exchange rates, sparking concerns about the sustainability of the nation’s debt burden.

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