The Nigerian Senate has approved President Bola Tinubu’s request to secure a $2.2 billion loan, a move aimed at addressing the N9.1 trillion deficit in the 2024 budget.
The decision, based on the recommendations of the Senate committee on local and foreign debt chaired by Aliyu Wamakko, comes amid growing debates about Nigeria’s reliance on external borrowing to fund its financial gaps.
The funds will reportedly be sourced through financial instruments like Eurobonds and Sukuk, with approximately $1.7 billion expected from Eurobonds and $500 million from Sukuk financing.
This borrowing plan was part of an external funding proposal endorsed by the Federal Executive Council (FEC), aiming to “strengthen the country’s finances and support economic reforms.”
Finance Minister Wale Edun emphasized that the borrowing would be executed within the current fiscal year, with the funding structure subject to market conditions and expert advice.
However, the loan adds to Nigeria’s rising debt profile, raising concerns among citizens and economic analysts about sustainability and accountability in debt management.
Critics argue that while the funds are critical for bridging budgetary deficits, the government must ensure transparency in their utilization and prioritize investments in sectors that generate economic growth.
Others caution against the implications of such borrowing on Nigeria’s long-term financial health, especially with the naira’s current exchange rate at N800 to a dollar.
This loan approval is part of a broader fiscal strategy under Tinubu’s administration, which has proposed a total expenditure of N47.9 trillion for the 2025 fiscal year.
With Nigeria’s economy facing inflation, unemployment, and currency devaluation, the success of this funding initiative will depend on its ability to drive economic reforms and stabilize the nation’s finances.
As market conditions and further developments unfold, all eyes are on how the government manages this significant injection of external financing.