News, Sport and Entertainment

While Nigeria’s debt stock hits N42.7tn, Nigerian Senate approve fresh $16bn loans

Buhari Nigeria27sDebtstock
Advertisements

Following the Senate’s confirmation of the Federal Government’s request for $16 billion and €1.02 billion in new loans, Nigeria’s debt stock would climb to N42.7 billion.

Using the Importers and Exporters’ Window exchange rate of N411.24/$1, the $16.2 billion loan is equivalent to N6.7 trillion, while the €1.02 billion loan are equivalent to N485.5 billion using the Central Bank of Nigeria’s exchange rate of N476/€1. The total value of the loans to be purchased now stands at N7.2 trillion.

The Senate had approved President Muhammadu Buhari’s (retd.) foreign borrowing proposals on Wednesday, in which he requested to borrow $16.2 billion, €1.02 billion, and a $125 million grant component to pay certain “legacy projects.”

Senator Clifford Ordia, the committee’s chairman, said Buhari’s proposal complied with the terms of the Debt Management Office (Establishment) Act, 2003, and the Fiscal Responsibility Act, 2007.

Nigeria’s debt, he claimed, has hit an all-time high of about 95% of retained revenue and 35% of yearly spending, according to him.

According to the senator, the development is a strain on the nation’s economy and resources for national development are restricted.

In addition to a more aggressive approach to revenue enhancement, “there are noticeable improvements in our revenues, but the growth is not sufficient or rapid enough to catch up with the pace of development required for our nation.”

Why we add to Buhari’s loans request by $12bn – Senator Ordia

Ordia further revealed that just $2.8 billion, or 10%, of the total amount approved by the National Assembly under the 2016-2018 External Borrowing Plan has been released to Nigeria.

The initiatives, which would require additional funding, would have significant multiplier effects in terms of encouraging economic growth, job creation, poverty reduction, health care, and improving the nation’s security architecture, according to the congressman.

He emphasised that the influence of commercial and engineering activity will result in increased tax income for the government.

Advertisements

Leave a Reply

Your email address will not be published. Required fields are marked *