Nigeria’s debt burden to hit N34 trillion with new loans

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The total debt stock for Nigeria could rise from N33 trillion to N34 trillion soon as the National Assembly approves another N1.1 trillion external loan request for the federal government.

The House of Representatives Thursday approved the external loan of $1.5 billion (about N571.5 billion) and €995 million (about N528.4 billion) for the federal government while the Senate had approved the request last week.

The Debt Management Office (DMO) had in March 2021 placed Nigeria’s Public debt at N32.915 trillion as of 31 December 2020. This included the debt stock of the federal and state governments as well as the Federal Capital Territory (FCT).

Total Public Debt to Gross Domestic Product as of 31 December 2020, was 21.61 per cent, which is within Nigeria’s new limit of 40 per cent.

According to the recommendations made in a report submitted to the House by the House Committee on Aids, Loans and Debt Management presented during plenary on Thursday, the loans are to be sourced from the World Bank and Export-Import Bank of Brazil which will be used for various purposes as a result of the Coronavirus (COVID-19) pandemic effects.

Presenting the report, Ahmed Safana Dayyabu stated that, the loans are to be used in financing priority projects of the federal government.

“The Committee notes that while Nigeria’s Total Public Debt Stock is on the increase, it is still relatively low Vis-a-Vis the country’s GDP and the increased borrowing requirements is needed to sustain the economic recovery,” he added.

Commenting, a former President of the Abuja Chamber of Commerce and Industry, Tony Ejinkeonye, called on the federal government to judiciously utilise the fresh external loans approved by the House of Representatives on Thursday.

Ejinkeonye, who is currently the Business Development Director Africa, Esilkroad Network, told Daily Trust that already the nation’s debt burden is high.

He called for alternative means of generating revenues instead of constant borrowing.

“We have to develop our industries. We need to develop critical infrastructure that will bring revenues to the country,” he advised, including expanding the tax net.

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