NIGERIA: Senate Approves $2.2 Billion Loan For 2024 Budget Deficit

By Utebor Paul, Nigeria

The Nigerian Senate has approved a $2.2 billion loan request by President Bola Ahmed Tinubu to make up for the ₦9.7 trillion budget deficit for the 2024 fiscal year.

During Tuesday’s plenary, the decision followed a report presented by the Senate Committee on Local and Foreign Debts, chaired by Senator Aliyu Wamakko.

Commending the committee for its swift evaluation of the proposal, Deputy Senate President Jibrin Barau described the move as critical for Nigeria’s fiscal stability.

The loan will be sourced through instruments such as Eurobonds and Sukuk financing. Finance Minister Wale Edun disclosed that $1.7 billion will come from Eurobonds, while $500 million is expected from Sukuk.

According to the Senate, the funds will support key reforms aimed at strengthening the country’s financial position and addressing economic challenges.

The funds will be used to strengthen the country’s finances and support economic reforms.

Nigeria’s total public debt has been on a steady rise, the debt includes external and domestic borrowing, with external debt making a significant portion. Concerns have been raised over the sustainability of the country’s debt amidst the nation’s dwindling economy and an overreliance on oil exports.

The approval of an additional $2.2 billion loan further increases Nigeria’s economic challenges, as servicing the debt remains a pressing issue.