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With national debt profile of $87.239 billion, Buhari writes Senate, seeks approval for fresh $4bn, €710m loans

Amid a national debt profile of $87.239 billion, President Muhammadu Buhari has asked the Senate to approve $4 billion and €710 million external loans.

The new request for the loans was contained in a letter addressed to Senate President, Ahmad Lawan, and read at plenary, on Tuesday.

Buhari said the proposed loan is to be financed through sovereign loans from the World Bank, French Development Agency, EXIM (Export-Import) Bank and IFAD (International Fund for Agricultural Development).

President stated in the letter that the loan would enable the Federal Government fund critical infrastructural projects in different sectors.

The letter reads: “I write on the above subject and submit the attached addendum to the proposed 2018-2020 external rolling borrowing plan for the consideration and concurrent approval of the Senate for the same to become effective.

“The distinguished Senate President may recall that we submitted a request on 2018-2020 borrowing plan for the approval of the Senate in May 2021.

“However, in view of other emerging needs and to ensure that all critical projects approved by FEC as of June 2021 are incorporated, I hereby forward an addendum to the proposed borrowing plan.

“The projects listed in the external borrowing plan are to be financed through sovereign loans from the World Bank, French Development Agency, EXIM Bank and IFAD in the total sum of $4,054,476,863 and €710 million and grant components of $125 million.”

On June 9, 2021, the Debt Management Office (DMO) said that Nigeria’s Public Debt Stock as at March 31, 2021, comprising of the Debt Stock of the Federal Government of Nigeria (FGN), 36 State Governments and the Federal Capital Territory (FCT) stood at N33.107 trillion or USD87.239 billion.

The Debt Stock also includes Promissory Notes in the sum of N940.220 billion issued to settle the inherited arrears of the FGN to State Governments, Oil Marketing Companies, Exporters and Local Contractors.

Compared to the Total Public Debt Stock of N32.916 trillion as at December 31, 2020, the increase in the Debt Stock was marginal at 0.58%.

Further analysis of the Public Debt Stock, shows that the increase was in the Domestic Debt Stock which grew by 2.11% from N20.21 trillion in December 2020 to N20.637 trillion as at March 31, 2021.

The FGN’s share of the Domestic Debt includes FGN Bonds, Sukuk and Green Bonds used to finance infrastructure and other capital projects as well as the N940.220 billion Promissory Notes.

External Debt Stock declined from USD33.348 billion as at December 31, 2020 to USD32.86 billion due to the redemption by Nigeria of the USD500 million Eurobond in January 2021.

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