After several minutes of deliberation, the Senate has granted approval to the ₦1.77 trillion ($2.2billion) loan request brought before it by President Bola Tinubu.
The funds was approved by the lawmakers after a voice vote in favor of the request which had divided Nigerians with some backing the president’s moves while others kicked against it.
Tinubu’s loan request approved on Thursday during plenary chaired by the Deputy Senate President, Barau Jibrin, would be used to partially finance the 9.7 trillion naira deficit of the 2024 fiscal year.
The approval was granted after the the Senate Committee on Local and Foreign Debts chaired by Sokoto lawmaker, Wammako Magatarkada, presented the committee report.
The request which was submitted by the President on Tuesday is part of a fresh external borrowing plan to partially finance the N9.7 trillion budget deficit for the 2024 fiscal year.
Tinubu, in his request, asked that the lawmakers grant him approval of a fresh N1.767 trillion, the equivalent of $2.209 billion, as a new external borrowing plan in the 2024 Appropriation Act.
The fresh loan is expected to stretch the amount spent on debt servicing by the Federal Government. The Central Bank of Nigeria recently said that it cost the Federal Government $3.58 billion to service foreign debt in the first nine months of 2024.
The CBN report on international payment statistics showed that the amount represents a 39.77 per cent increase from the $2.56bn spent during the same period in 2023.
According to the report, while the highest monthly debt servicing payment in 2024 occurred in May, amounting to $854.37m, the highest monthly expenditure in 2023 was $641.70m, recorded in July.
The trend in foreign debt servicing by the CBN highlights the rising cost of debt obligations by Nigeria.
