Nigeria’s total debt stock under President Muhammadu Buhari kepp skyrocketing, with the latest approval by the Senate of fresh loan requests of about $16billion, plus €1.02billion.
The fresh loans translate to a total of N7.06 trillion, made up of about N6.58 trillion (at exchange rate of N411.37 to the dollar), and N480.15 billion (at N471.08 to Euro) as at November 10.
Added to about N35.5trillion accumulated since the inception of the administration, the total figure climbs to a new high level in excess of N42.56 trillion.
On Wednesday, the Senate gave approval for President Buhari’s request to borrow $16.2billion, €1.02billion, in addition to a $125million grant to finance the implementation of some “legacy projects.”
The approval also covered the request by the Bank of Industries for the issuance of between €500 million and €750million Eurobond in the international capital market.
The approval of the requests was, however, not without a caveat insisting the terms and conditions associated with the loans must disclosed to the National Assembly from the relevant agencies before their execution, for proper scrutiny and documentation.
The demand was made by the Deputy Senate President, Ovie Omo-Agege, who said details of the loans as well as the terms and conditions must be submitted to the National Assembly.
Omo-Agege said, the approval thelawmakers gave was to enable the government commence negotiations on time for the loans.
The Senate gave the approval after considering report by its Committee on Local and Foreign Debts on the proposed 2018-2020 External Borrowing (Rolling) Plan.
The Chairman of the committee, Clifford Ordia, noted in his presentation that Buhari’s latest request comformed with due process and dictates of the relevant laws, namely the Debt Management Office Act, 2003 and the Fiscal Responsibility Act, 2007.
These laws, Ordia said, mandate the President to seek and obtain the National Assembly approval to borrow externally.
Details of the borrowing plan showed that out of the amount approved by the National Assembly, about $3.53 billion would come from the World Bank; $5.07 ibillion from the China EXIM Bank, and $3.9 billion from the China Industrial and Commercial Bank.
Also, another $2.8 billion was being expected from the China Development Bank; $698 million from the Africa Development Bank; €345 million from the French Development Agency; €175 milion from the European Investment Bank, and $190 million from a group of European financial instituktions.
Beyond these facilities, about €500 million would come from the international capital market and $62.1 million from Standard Chartered Bank/SINOCURE.
Analysts are concerned that Nigeria’s appetote for foreign borrowings is pushing the country into debt triangle, with about 95 percent of retained revenue going into the servicing of debts, and 35 percent available for expenditure.