Unic Press UK: The upper house of Nigeria’s bicameral legislature, the Senate, on Tuesday approved a request by President Buhari to seek $5.5 billion [₦1.96 trillion] in foreign loans.
The Nigerian president Muhammadu Buhari had written a letter to the Nigerian Senate on October 2017, seeking approval to borrow $5.5 billion. The government said in the letter that $2.5 billion would be utilized in reducing the 2017 budget deficit, while $3 billion would refinance maturing domestic debt.
Prior to approving the $5.5 billion external borrowing, the Senate Committee on Foreign and Local Debts, which is currently led by Shehu Sani, wondered what the government was doing with the swathes of monies recovered from individuals who had stolen from the government. The Committee also raised concerns over the 40 to 50 years repayment plan, which might put Nigerians in bondage.
Speaking to journalist in Lagos a few days’ ago, a former Central Bank of Nigeria (CBN) Deputy Governor in-charge of Financial System Stability, Kingsley Moghalu, decried the current debt profile of the country. He said:
“The Federal Government recently requested the approval of $5.5 billion foreign loan from the National Assembly, but when you consider that, more than 60 per cent of revenues earned in Nigeria already goes into debt servicing, the country is clearly moving into dangerous territory. We can stimulate the economy and build infrastructure by improving tax collection,” the Guardian, Nigeria, reported.
Nigeria is one of Africa’s largest economies; and relies heavily on oil exports for its major source of foreign exchange earnings and revenues.
The country’s Gross Domestic Product (GDP) was $406 billion in 2016.
62% of Nigeria’s circa 170 million people still live in extreme poverty.
DMO: Nigeria’s Public Debt Stock as at September 30, 2017 (In millions)
Source: Nigeria’s Debt Management Office (DMO).