The Senate has approved President Bola Tinubu’s ₦1.77 trillion ($2.2 billion) loan request following a voice vote in favor of the proposal.
The approval, presided over by Deputy Senate President Barau Jibrin, came after the Senate Committee on Local and Foreign Debts, chaired by Senator Wammako Magatarkada (APC, Sokoto North), presented its report.
Tinubu’s loan request, submitted on Tuesday, is part of a new external borrowing plan aimed at partially financing the ₦9.7 trillion budget deficit for the 2024 fiscal year. The request seeks approval for ₦1.767 trillion, equivalent to $2.209 billion, as part of the 2024 Appropriation Act.
This fresh loan is expected to contribute to the growing burden of debt servicing for the Federal Government. According to the Central Bank of Nigeria (CBN), the government spent $3.58 billion on servicing foreign debt during the first nine months of 2024—a 39.77% increase from the $2.56 billion spent in the same period of 2023.
The CBN’s international payment statistics revealed that the highest debt servicing payment in 2024 occurred in May, totaling $854.37 million, a significant rise from $641.70 million in July 2023.
The report also highlighted notable fluctuations in monthly debt servicing costs. In January 2024, payments surged by 398.89%, rising to $560.52 million from $112.35 million in January 2023. February saw a slight decrease of 1.84%, with payments dropping from $288.54 million in 2023 to $283.22 million in 2024. March recorded a 31.04% drop, while April saw a significant 131.77% increase in payments.
The sharp increase in debt servicing costs in May 2024, rising by 286.52% to $854.37 million, underscores the mounting pressure of Nigeria’s foreign debt obligations. While some months saw declines, September 2024 saw a 17.49% increase in payments, rising to $515.81 million compared to $439.06 million in the same month in 2023.
Amid rising exchange rates, these figures raise concerns about the escalating cost of servicing Nigeria’s foreign debt, further straining the country’s financial resources.
