Nigeria’s Public Debt Skyrocketed to N35 trillion, as Senate approves FG’s request to borrow N2.3trillion

Nigerian Senate - Public Debt

The Nigerian Senate today approved a loan request by the Federal Government of Nigeria to borrow additional sum of $6.1 billion translating to about N2.3trillion.

According to different media sources, the request was approved following the consideration of the report of the Senate Committee on Local and Foreign Debts at plenary.

Presenting the report, the Chairman of the committee, Senator Clifford Ordia stated that the request is not new as it had already been approved in the borrowing plan that the National Assembly passed in the 2021 Appropriation Bill.

He further disclosed that the National Assembly already approved the borrowing of N4.6 trillion in the 2021 Appropriation Act and that the new borrowing of N2.3 trillion will part-finance the deficit in the 2021 budget

Sequel to the approval, the Senate President, Ahmad Lawan, called for proper documentation and verification of the deployment of various loans borrowed by the government so far. He stated that the National Assembly must make sure that there are no frivolous expenditures by the executive.

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Commenting on the recent development, Lawan said: “Let me thank the committee, this is not a new loan. This is a borrowing plan we have approved. What we have done is to provide the necessary resolutions for the implementation of it.

“Every cent counts. Our committees must be alive to oversee it. No frivolous expenditures should be entertained.”

Recall that in May, the President of Nigeria, Muhammadu Buhari had asked the National Assembly to consider and approve the aforementioned loan request. The President explained that the loan will be used to fund “projects from priority sectors of the economy namely: power, transportation, agriculture and rural development, education, health, provision of counterpart funding for multilateral and bilateral projects, defence and water resources.”

The President further explained that the loan will be raised from multilateral and bilateral lenders as well as the international capital market.

Recall that latest data from the Debt Management Office (DMO) shows that total public debt as at 31st of December 2020 stands at N33.1 trillion ($87.24 billion). With the addition of the recent loan request of about N2.3 trillion, the total public debt profile will therefore increase to about N35.4 trillion. understands that Nigeria’s 2021 budget already has a deficit of N5.6 trillion.