By Daniel Edu
“President Bola Tinubu’s request to the Senate for approval to borrow an additional $7.8 billion and €100 million has sparked concerns, pushing Nigeria’s foreign debt beyond $51 billion. Financial analysts have questioned the official explanation behind the borrowing, suggesting that it might be a short-term solution to address the country’s balance of payments crisis.
As of June 2023, Nigeria’s foreign debt was at $43.2 billion, with domestic debt reaching N54.1 trillion, resulting in a total public debt of N113.4 trillion. With the proposed additional borrowing and the depreciation of the naira, the total public debt is expected to reach N130 trillion.
In a letter to the Senate, President Tinubu justified the request, stating that the projects covered various sectors, focusing on infrastructure, agriculture, health, education, water supply, security, employment, and financial management reforms. He emphasized that external borrowing was necessary to bridge the financing gap, particularly for critical infrastructure projects like power and healthcare.
Financial experts have expressed worry over this new borrowing. Some believe the borrowing is aimed at addressing the current balance of payment crisis and ensuring confidence in the economy. Others argue that the government should explore non-debt financing sources and improve export volumes and production capacity to boost GDP.
As debates continue, concerns grow about the implications of further increasing Nigeria’s foreign debt and the urgent need for sustainable economic solutions beyond borrowing.”
