Nigeria has been gripped by debt stock totaling a whopping N34 trillion following approval of new loans.
Muhammadu Buhari
With the approval of a new loan by the national assembly for the executive, Nigeria's debt stock has risen from N33 trillion to N34trillion.
This comes after the national assembly some days ago approved another N1.1trillon external loan request for the federal government, according to a report by DailyTrust.
The House of Representatives yesterday approved the external loan of $1.5 billion (about N571.5bn) and €995 million (about N528.4bn) 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 N32.915tr as of December 31, 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 at December 31, 2020 was 21.61 percent, which is within Nigeria’s new limit of 40 percent.”
According to the recommendations made in a report submitted to the House by the House Committee on Aids, Loans and Debt Management presented to the House 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 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 on Thursday by the House of Representatives.
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 the 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 tax net.