By Nchetachi Chukwuajah
On Tuesday, October 7, President Bola Tinubu again sought approval from the National Assembly for a fresh $2.3 billion external loan and to authorise the issuance of a $500 million debut sovereign Sukuk on the international Islamic finance market.
In a letter sent to the National Assembly and read on the floor of the House of Representatives by the Speaker of the House, Tajudeen Abbas, Tinubu said the fresh loans would be used to partly
finance the 2025 budget deficit and refinance maturing Eurobonds due in November.
“The 2025 fiscal framework anticipates $9.27 billion in new borrowings to address the budget deficit, of which $1.84 billion is earmarked for external sources at an assumed exchange rate of
N1,500 to the dollar,” the letter read.
Tinubu added that the external borrowing could be secured through Eurobonds, syndicated loans, bridge financing, or directly from international banks and multilateral institutions.
Also, the African Development Bank (AfDB), on Monday, October 6, said it will lend Nigeria $500 million this year as part of a $1 billion budget support programme, following economic reforms introduced by Tinubu.
According to Reuters, an Executive Director of the AfDB, Bode Oyetunde, who represents Nigeria and São Tomé and Príncipe on the AfDB board, said the loan could be approved before year-end.
“We have been working strongly to support Nigeria’s very bold and aggressive macroeconomic reforms under President Tinubu. Given all these reforms, it was important to support Nigeria.
“They asked us for $1.5 billion. We are able to do $1 billion over two years. Last year, we provided $500 million in budget support. This year, we are looking to do another $500 million, subject to board approval,” Oyetunde told Reuters.
Tinubu’s loan requests since assuming office in May 2023 raises concern among Nigerians, even as the country faces the dual challenge of budget deficit financing and complex debt portfolio.
Reacting the news of the fresh loan request, Nigerians took to social media to decry the unending loan requests of the administration.
@alofe_oluwafemi tweeted, “This man love(s) borrowing than profits.”
@Kingjoseph147 added, “When we thought we had seen it all…”
@ValentineU86067 wrote, “Since this man came to power, all he does is only borrowing nothing more. Even after removing subsidy.”
Others also queried the impact of the borrowing on the economy and citizens’ lives, while enumerating the government’s previous policies.
@JUnuigboje99352 tweeted, “That is why Obasanjo is Best president Nigeria ever had. How can you remove subsidies from light and fuel, taxing the citizens in every aspect of transaction and still borrowing. Where is the trillions of dollars saved from the subsidies. This is exactly what
Bode George told us.”
@Smartek2050 wrote, “How will the loan impact Nigeria’s economic growth and development in the long term.”
@OkwunnaU added, “Another borrowing, this man will sell Nigeria and ran (sic) to
Conakry-Guinea after his tenure. You removed subsidy, devalued naira to the last decimal, our crude production has risen from 1 million barrels per day to 1.6 million, etc yet you’re still borrowing. God pls help us.”
