In line with Economy Post report, President Bola Tinubu’s government has gone on a borrowing spree after securing the World Bank’s $1.95 billion facility.
Insiders in Tinubu’s government had told Economy Post about his plan to seek new loans early next year.
However, this has come too early as the president now seeks the Senate approval for fresh $7.8bn and €100m loans.
The letter from President Tinubu to the Senate on November 2 read, “The Senate may wish to note that the past administration approved the 2022–2024 borrowing plan at the Federal Executive Council which was held on the 15th day of May 2023.
“The projects cut across all sectors with specific emphasis on infrastructure, agriculture, health, education, water supply, security and employment as well as financial management reforms, among others.
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“The total facility of the projects and programmes under the borrowing plan is 7,864,508,559 dollars and then in Euro, 100 million euros respectively,” Punch reported.
This will not be the end of the debt binge as the government is expected to seek more loans to fund the budget deficit and solve other challenges in 2024, insiders said.
The Bola Tinubu government is planning to run a N30.6 trillion deficit budget between 2024 and 2026, according to the Medium-term Expenditure Framework (MTEF), which was reported by Nairametrics.
The government will incur a deficit of N9.04 trillion in its 2024 budget, the MTEF document said.
Sale of govt assets
Insiders said the Tinubu administration would consider selling government assets to raise funds. Some of the assets being considered for sale in 2024 are: Tafawa Balewa Square in Lagos, hydro power plants at Giri, Oyan, Lower Usuma, Katsina-Ala, and Kaduna.
Economy Post also understands that the government is planning to sell all the National Integrated Power Projects (NIPPs), including Egbema, Olorunsogo, Calabar II, Benin (located at Ihorbor), Omotosho II, Sapele, Okpai and Geregu II plants.
“The plan did not start with Tinubu. Buhari wanted to sell those national assets but could not do it. If Tinubu wants to do it, I do not see anything wrong with it. My only challenge is that while the government says there is no money, it is taking steps that can be considered wasteful,” a public sector economist, Dr Charles Umomo, told Economy Post.
Punch had, in 2022, reported that the immediate past president, Mr Muhammadu Buhari, was considering concessioning or selling Calabar and Kano free zones as well as Abuja Water Board, Aluminium Smelter Company of Nigeria, National Film Corporation, National Theatre and Lagos International Trade Fair. It had quoted Bureau of Public Enterprises (BPE)’s Head of Public Communications, Mr Uzoma Chidi Ibeh, as saying that “the list is being compiled. The Federal Government is putting a lot of money into financing those projects. The government pays staff liability and salaries but it is tired of doing that.”
READ ALSO: After World Bank facility, Tinubu eyes new loan, debt hits N88.6trn
Foreign debt rises
As at June 2023, external debt was estimated at $43.159 billion, according to the Debt Management Office (DMO). With the $1.95 billion already secured as well as $7.8bn and €100m loans being sought, Nigeria’s external debt is likely to hit $53.016 billion by end of 2023. 
Economists believe that borrowing in foreign currencies at this point should be discouraged, as it is more expensive to service and pay back.
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“The naira has depreciated but the dollar is much stronger. So, we will pay more in naira terms when you borrow in foreign currencies. So, it is not something we should always do. On the flip side, for the Nigerian economy in need of foreign exchange, this will be beneficial because it will aid inflows,” said a United Kingdom-based economist, Mr John Abbah.
Nigeria faces a debt servicing problem. Total debt servicing from April to June 2023 was $368.262 million, according to the DMO. Nigeria is more exposed to multilateral organisations whose debt servicing within the 3-month period was $172.286 million. This is followed by the International Development Association, with debt servicing totalling $$116.350 million. Third on the list is the bilateral organisations, with debt servicing estimated at $39.133 million.
“We should begin to look at other creative ways of generating revenue. Borrowing or debt should be the last resort,” said a business analyst, Ms Aligbe Adodo.
