Buhari Continues Borrowing Spree, Asks Senate to Approve $4.179bn, €710m More Loans

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Despite criticisms trailing the huge external debts against Nigeria and the need to stop further borrowing, President Muhammadu Buhari has again sought the approval of the Senate for $4.179 billion and €710m more loans.
There is also a Grant Component of $125,000,000.00 as part of the request to the Senate.
The loan according to the President is to fund projects that had been captured under the 2018-2021 borrowing plan.
In the request, the President had identified that the loan will come from from the World Bank, French Development Agency (AFD), China-Exim Bank, International Fund for Agricultural Development (IFAD), Credit Suisse Group and Standard Chatered/China Export and Credit
It would be recalled that the Senate had also approved the sum of $6.1 billion from the international capital market as requested by the President as at May this year.
Few days ago, it was revealed that Nigeria had spent the sum of N11.679tn spent in the last five years on debt servicing.
Figures released on Monday during the “Analysis of the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper,” an event organised by the Centre for Social Justice (CSJ) showed that this was as only N8.31trillion was spent on capital/development expenditure in five years.
A presentation by the Lead Director of CSJ, Eze Onyekpere, showed that in 2019 and 2020, the sums of N2.254 trillion and N2.951 trillion were spent on debt servicing respectively.
The breakdown of the total figures of N11.679tn further showed that an average of N1.386 trillion is spent annually on debt servicing.
Onyekpere who referred to the statistics from the Debt Management Office (DMO) said that public debt which was N12,603 trillion as at 2015 had continued to rise yearly.
According to the statistics public debt was N17.360 trillion in 2016, N21.725 trillion in 2017, N24.387 trillion in 2918, N27.401 trillion in 2019 and N32.915 trillion in 2020.
He observed that between 2015 and 2020, Nigeria’s public debt rose by 161 per cent, adding that this been with an annual increase of 37.74 per cent.
Onyekpere said, “The Consolidated Debt Statement affirms the Medium-Term Debt Management Strategy (MTDS) 2020-2023 as the governing policy strategy. The MTEF states that the MTDS focuses on the development of an optimal borrowing structure to fund the government’s financial gap and needs, taking into consideration borrowing options, cost of borrowing and the associated risks with borrowing.
“Under the MTDS, the proposed portfolio composition is 70 per cent for domestic debt and 30 per cent for external debt while total debt as a ratio of the GDP has been increased from 25 per cent to 40 per cent; average tenure of debt portfolio is a minimum of ten years.
“It proposed up to five per cent of the GDP in sovereign guarantees for private companies executing public projects and Promissory Notes is to be issued to settle government arrears, Ways and Means Advance at the Central Bank of Nigeria (CBN), and the debt stock of 5 state owned enterprises (SOEs.”