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Nigeria’s foreign debt to hit $51bn as President Tinubu seeks new $7.8bn

Published

1 year ago

November 2, 2023

Nigerian President, Bola Tinubu, submitted a fresh loan request to the Senate on Wednesday, seeking approval to borrow an additional $7.8 billion and €100 million as part of his 2022–2024 borrowing plan.

Nigeria’s foreign debt as of June 2023 was put at $43.2 billion, while domestic debt is put at N54.1 trillion, bringing public debt to N113.4 trillion. But it is expected to rise further to about $51 billion following the presidential request for new borrowing, coupled with the depreciation of the naira.

In a letter sent to the Senate yesterday, Tinubu claimed the request was based on the previous approval of the administration of President Muhammadu Buhari, following a meeting of the Federal Executive Council in May 2023.

“The Senate may wish to note that the past administration approved the 2022–2024 borrowing plan at the Federal Executive Council which was held on the 15th day of May 2023.

“The projects cut across all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, security and employment as well as financial management reforms, among others”, Tinubu’s letter reads.

Meanwhile, on the same day, the World Bank Country Director for Nigeria, Shubham Chaudhuri, stated that the bank had committed more than $11 billion in the past three years to Nigeria’s government at both the federal and the sub-national levels.

During his opening remarks at the State House Conference Centre in Abuja, Chaudhuri expressed his goodwill to ministers, presidential aides, permanent secretaries, and other high-ranking government employees, as part of a three-day cabinet retreat. The bank would assist President Tinubu in his administration’s difficult mission of rescuing millions of Nigerians from poverty and improving everyone’s quality of life, he further promised.

“Although we are at the World Bank, we’re a development organisation and over the last three and a half, four years that I’ve been here, our board has committed over $11 billion in financing for the government, and our financing is meant to go to governments at both the federal and at the sub-national levels. So we’re here to support your programmes, and we take guidance from you”, he said.

The level of indebtedness in African countries is at its highest in more than a decade, largely due to the COVID-19 pandemic, Russia’s invasion of Ukraine, and skyrocketing inflation. African nations were forced to incur even more debt, and as a result, 21 low-income African nations are currently either insolvent or at great risk of experiencing debt hardship.

Related Topics:#Tinubu Featured Nigeria Nigeria's foreign debt

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IMF mission concludes 4th loan program assessment in Egypt

Published

2 hours ago

November 22, 2024

Ifeoluwa Dada

Following the completion of a recent visit to Egypt, the International Monetary Fund (IMF) has announced that its mission had achieved significant strides in policy talks aimed at concluding the fourth review of the IMF loan program.

The review is the fourth in Egypt’s most recent 46-month IMF loan program, which was authorised in 2022 and increased to $8 billion this year following an economic crisis characterised by high inflation and chronic foreign exchange shortages. It may unleash more than $1.2 billion in financing.

Along with reaffirming its commitment to maintain a flexible exchange rate system, the IMF stated that Egypt “has implemented key reforms to preserve macroeconomic stability,” including the unification of the currency rate that facilitated imports.

Earlier on Wednesday, Egypt’s Prime Minister Mostafa Madbouly said Cairo has asked the IMF to modify the targets for the programme not only for this year, but for its full duration, he added without giving more details.

“Discussions will continue over the coming days to finalize agreement on the remaining policies and reforms that could support the completion of the fourth review,” the IMF added in its statement.

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Kenya seeks $750m from World Bank, obtains $200m from AfDB— Official

Published

2 days ago

November 20, 2024

Ifeoluwa Dada

The head of debt management for the finance ministry told Reuters that Kenya had obtained a $200 million loan from the African Development Bank (AfDB) and was negotiating a fresh $750 million loan with the World Bank.

After being forced to abandon proposed tax rises costing more than 346 billion shillings ($2.68 billion) in June due to fatal demonstrations, the East African nation’s administration, which has been grappling with significant debt, has been frantically seeking fresh funding.

The Finance Ministry’s public debt management office director general, Raphael Owino, told Reuters that the IMF’s October clearance of the seventh and eighth reviews, which opened the door for a $606 million loan tranche, had aided the ministry’s talks for more loans.

“The World Bank is coming on board, riding on the back of IMF receipts,” Owino said. “The AfDB is already on board.”

The discussions for more assistance, which came under the World Bank’s “Development Policy Operations” (DPO) with the government, were confirmed by a representative at the organization’s Kenya office.

“The amount of the current (loan) is yet to be determined. The amount will also depend on the implementation of the policy reforms agreed upon,” the spokesperson told Reuters, adding that past DPO loans averaged about $750 million.

In May, the World Bank approved the latest round of DPO loans, totalling $1.2 billion.

According to a statement made last month by Finance Minister John Mbadi, Kenya has set a foreign borrowing goal of 168 billion shillings for the fiscal year ending in June 2025.