Nigeria’s borrowing spree continues, and many are left scratching their heads, wondering where all the borrowed money has gone. The country’s situation seems to be getting worse, not better, despite all the loans. Brace yourselves, fellow Nigerians, because at this rate, they might just put up a ‘For Sale’ sign on the nation soon.
President Bola Tinubu made an eyebrow-raising move on Wednesday when he asked the Senate to approve a whopping $8 billion in new debt as part of a 2022-24 external borrowing plan. The plan supposedly aims to finance various sectors like infrastructure, health, education, and security.
Nigeria, the giant of Africa, and a top oil producer, has been leaning heavily on debt recently. The reason? Lower tax revenues and a decline in oil exports, which happen to be the country’s main source of foreign currency.
In his letter to the Senate, President Tinubu sought approval for $7.86 billion and an additional 100 million euros (approximately $105.40 million). However, he conveniently forgot to mention where this mountain of cash would magically appear from.
Nigeria has been shopping in international credit markets, using tools like eurobonds, and knocking on the doors of lenders like the World Bank and African Development Bank to keep its budget afloat.
Tinubu’s justification for all this borrowing is, well, “in view of the present economic realities facing the country.” Apparently, the external loans are essential to fund critical infrastructure projects, such as power, railways, and healthcare, among other things.
The government claims it wants to pivot towards investments instead of relying on borrowed money to create jobs and build stuff. However, in the background, both the Senate and House of Assembly are mulling over a supplementary budget of a jaw-dropping 2.176 trillion naira (around $2.8 billion) for what they call “urgent issues,” which include defense and security.
Just to give you some perspective, Nigeria’s cabinet recently gave the green light to a colossal 26.01 trillion naira (about $34 billion) for next year’s budget. Shockingly, a third of that sum is earmarked for interest payments on the country’s existing debt.
If you’re wondering where all this borrowed money is coming from, it turns out a hefty 40% of Nigeria’s total debt is external. So yes, we seem to be addicted to borrowing, while politicians somehow keep buying new cars and houses everywhere, leaving us all in bewildering awe.
