By Ayo Kehinde
President Bola Tinubu has written to the National Assembly, seeking approval of a fresh N1.767 trillion as a new external borrowing plan in the 2024 appropriation act.
He also transmitted the Medium-Term Expenditure Framework and the Fiscal Strategy Paper, MTEF/FSP 2025- 2027 and the National Social Investment Programme establishment amendment bill, to the National Assembly for consideration and approval.
According to the President, the National Social Investment Programme establishment amendment bill, will make the social register, the primary tool for the implementation of the federal government’s social welfare programmes.
The requests were conveyed in letters read at plenary on Tuesday, by Tajudeen Abbas, speaker of the House of Representatives.
President Tinubu said the new loan will be used to part-finance the budget deficit of N9.7 trillion for the 2024 budget.
The new request is coming amidst the recent disclosure by the Central Bank of Nigeria (CBN) that the Federal Government spent $3.58 billion servicing the country’s foreign debt in the first nine months of 2024, representing 39.77 percent increase from the $2.56 billion spent during the same period in 2023.
According to the apex bank, while the highest monthly debt servicing payment in 2024 occurred in May, amounting to $854.37 million, the highest monthly expenditure in 2023 was $641.70 million, recorded in July.
The trend in international debt servicing by the CBN highlights the rising cost of debt obligations by Nigeria. A breakdown of international debt figures showed that in January 2024, debt servicing costs surged by 398.89 percent, rising to $560.52 million from $112.35 million in January 2023. February, however, saw a slight decline of 1.84 percent, with payments reducing from $288.54 million in 2023 to $283.22 million in 2024.
March recorded a 31.04 percent drop in payments, falling to $276.17 million from $400.47 million in the same period last year. April saw a significant rise of 131.77 percent, with $215.20 million paid in 2024 compared to $92.85 million in 2023.
The highest debt servicing payment occurred in May 2024, when $854.37 million was spent, reflecting a 286.52 percent increase compared to $221.05 million in May 2023. June, on the other hand, saw a 6.51 percent decline, with $50.82 million paid in 2024, down from $54.36 million in 2023.
July 2024 recorded a 15.48 percent reduction, with payments dropping to $542.50 million from $641.70 million in July 2023. In August, there was another decline of 9.69 percent, as $279.95 million was paid compared to $309.96 million in 2023. However, September 2024 saw a 17.49 percent increase, with payments rising to $515.81 million from $439.06 million in the same month last year.
Given rising exchange rates, the data raises concerns about the growing pressure of Nigeria’s foreign debt obligations.
Similarly, there has been a rise in debts of the 36 states of the federation. The total debts of the 36 states in Nigeria rose to N11.47 trillion as of June 30, 2024, despite allocations by the Federal Accounts Allocation Committee (FAAC), and their respective internally generated revenues (IGR).
An analysis of data from the public debt reports released by the Debt Management Office (DMO), said the rise was 14.57 percent higher than the N10.01 trillion recorded in December 2023.
External debt for the states and the Federal Capital Territory also climbed from $4.61 billion to $4.89 billion within the period under review.
In naira terms, the debts increased by 73.46 percent, from N4.15 trillion to N7.2 trillion, following the devaluation of the naira from N899.39/$1 in December 2023 to N1,470.19/$1 by June 2024.
However, domestic debt for states and the FCT declined from N5.86 trillion to N4.27 trillion.
In total, states and the FCT accounted for Nigeria’s public debt of N134.3 trillion in June 2024, a decrease from their 10.29 percent share in December 2023, even as their nominal debt levels increased.
