Nigeria’s foreign debt is on track to rise to an estimated $51 billion following President Bola Tinubu’s request to the Senate for approval to borrow an additional $7.8 billion and €100 million as part of the 2022-2024 borrowing plan.
Despite the official explanations provided for the borrowing, some financial analysts have voiced skepticism, contending that these loans are primarily aimed at alleviating the country’s ongoing balance of payments crisis.
As of June 2023, Nigeria’s foreign debt stood at $43.2 billion, with domestic debt reaching N54.1 trillion, resulting in a total public debt of N113.4 trillion.
With the President’s request for additional borrowing, coupled with the depreciation of the naira, the overall public debt is expected to surge to N130 trillion.
In a letter addressed to the Senate, President Tinubu clarified that the request aligns with an approval granted by the administration of President Muhammadu Buhari after a May 2023 Federal Executive Council (FEC) meeting.
The letter outlines the borrowing plan, which encompasses a range of projects spanning infrastructure, agriculture, health, education, water supply, security, employment, and financial management reforms, among other areas.
The total facility for these projects and programs under the borrowing plan amounts to $7,864,508,559 in dollars and €100 million in euros.
Moreover, President Tinubu highlighted that, following the removal of fuel subsidies and its impact on the national economy, the African Development Bank (AfDB) and the World Bank Group (WBG) have expressed interest in supporting Nigeria’s economic recovery.
They have pledged sums of $1 billion and $2 billion, respectively, in addition to the Federal Executive Council’s endorsement of the 2022-2024 external borrowing plan.