By Abiola Olawale
President Bola Ahmed Tinubu has formally submitted a request to the National Assembly, seeking legislative approval for a new external borrowing plan amounting to N1.767 trillion.
This proposal is intended to be included in the 2024 appropriation act.The President explained that the proposed borrowing is expected to secure funding for various projects and initiatives in the upcoming fiscal year.
If approved, the loan will be used to part-finance the budget deficit of N9.7tn for the 2024 budget, according to the federal government.
The president’s request was read by the speaker during plenary on Tuesday. Tinubu has also forwarded the MTEF/ FSP 2025- 2027 to parliament and the National Social Investment Programme establishment amendment bill, to make the social register the primary tool for the implementation of the federal government’s social welfare programmes.
The New Diplomat reports that this comes after the Central Bank of Nigeria (CBN) recently revealed that the Federal Government spent $3.58 billion servicing the country’s foreign debt in the first nine months of 2024.
According to official data sourced from the CBN, 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 international debt servicing by the CBN highlights the rising cost of debt obligations by Nigeria.
It would be recalled also that the New Diplomat had reported that concerns emerged in some quarters after the Federal Government outlined its budgetary plans for the years 2025 to 2027.
This is as a substantial portion of the budget is set to be directed towards servicing existing debt, which is expected to surpass the amount designated for vital capital expenditures.
The New Diplomat reports that the Federal Executive Council (FEC), meeting which was presided over by President Tinubu, last week approved the 2025 fiscal budget proposal as part of the Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper for 2025-2027 by the Fiscal Responsibility Act of 2007.
A breakdown of the recently approved 2025–2027 Medium-Term Expenditure Framework and Fiscal Strategy Paper shows that FG’s projected debt servicing costs was put at N50.39 trillion for the three years, surpassing the N48.93 trillion earmarked for capital expenditures.
The escalating costs of debt servicing are becoming a pressing concern, with projections indicating an increase of 26.7%, rising from N15.38 trillion in 2025 to N19.49 trillion by 2027.
