Nigeria’s debt may climb above $51.75bn as FG plans to borrow N7.8trn for 2024 budget deficit

President Bola Ahmed Tinubu said on Wednesday that his government will finance the 2024 budget with N7. 8 trillion loan.

Persecondnews reports that the President presented his first budget tagged, “Renewed hope” of N27.5 trillion for the 2024 fiscal year to a joint session of the National Assembly.

Borrowings totaling N7.83 trillion are in the offing with N298.49 billion from privatization proceeds, and N1.05 trillion drawn down on multilateral and bilateral loans secured for specific development projects, he told the lawmakers.

Tinubu had earlier proposed a new $8.6bn and €100 million foreign loans to the National Assembly to be secured by his administration.

If approved, Nigeria’s external debt profile will hit over $51.75 billion.

The President’s request is part of the external borrowing plan for 2022-2024 for critical infrastructure such as power, roads, water, rail, and health.

The country’s external debt stock at as June 2023, according to data from the Debt Management Office, DMO, stood at $43.159 billion, while its domestic debt stock is N54.130 trillion.

Analysis of the external debt showed that multilateral borrowing gulped $20.790 billion; bilateral, $5.518; commercial, $15.618 billion; promissory notes $931.7 million and $300 million.

Meanwhile, Nigeria’s total public debt (domestic and external) as at June 2023 stood at N87.379 trillion.

The letter for the request read by President of the Senate, Senator Godswill Akpabio, and Speaker of the House of Representatives, Tajudeen Abbas, stated: “I write in respect of the above subject and to submit the attached Federal Government’s 2022-2024 external borrowing plan for consideration and early approval of the National Assembly to ensure prompt implementation of the projects.”

Tinubu while giving a breakdown of the 2024 Appropriation Bill, said: “Accordingly, an aggregate expenditure of 27.5 trillion naira is proposed for the Federal Government in 2024 of which the non-debt recurrent expenditure is N9.92 trillion while debt service is projected to be 8.25 trillion nairas and capital expenditure is N8.7 trillion.

“Nigeria remains committed to meeting its debt obligations. Projected debt service is 45% of the expected total revenue.

“The budget deficit is projected at 9.18 trillion naira in 2024 or 3.88 percent of GDP. This is lower than the 13.78 trillion naira deficit recorded in 2023, which represented 6.11 percent of GDP.”

The deficit will be financed by new borrowings totaling 7.83 trillion naira, 298.49 billion naira from privatization proceeds, and 1.05 trillion naira drawn down on multilateral and bilateral loans.