…The new borrowing plan swells the already ballooned debt profile of the country.
…There was a broad-based increase across the domestic (53.0% of the total public debt) and external (47.0% of total public) debt stock in recent times.
TUE NOV 19 2024-theGBJournal| President Bola Tinubu today submitted a borrowing request to the Senate, seeking approval for the execution of a new external borrowing totaling N1,76 trillion (equivalent of $2.209 billion at the Budget Exchange Rate of USD1.00/N800) as outlined in the 2024 Appropriation Act.
The President suggested that the fresh borrowing plan will be expended on part-financing the national deficit of N9.7 trillion accrued in the 2024 budget.
According to the President, the request aligns with the stipulations outlined in Sections 21(1) and 27(1) of the Debt Management Office (DMO) (Establishment, Etc.) Act of 2003, as well as receiving the endorsement of the Federal Executive Council.
Alongside President Tinubu’s request is the MTEF/FSP 2025-2027 to National Assembly and the National Social Investment amendment bill which seeks to make the social register the primary tool for the implementation of the federal government’s social welfare programs.
The new borrowing plan swells the already ballooned debt profile of the country. There was a broad-based increase across the domestic (53.0% of the total public debt) and external (47.0% of total public) debt stock in recent times.
Specifically, the total domestic debt stock rose by 8.5% q/q to N71.22 trillion (Q1-24: N65.65 trillion), while total external debt increased by 1.9% q/q to USD42.90 billion (vs -0.9% q/q to USD42.12 billion in Q1-24), reflecting additional borrowing from the World Bank (USD1.22 billion) amid matured IMF loan repayments (USD418.8 million).
In naira terms, total external debt rose by 12.6% q/q to N63.07 trillion (Q1-24: N56.02 trillion) using an average exchange rate value of N1,470.19/USD in Q2-24, compared to N1,330.26/USD in Q1-24. Total debt on a year-on-year basis grew by 53.7%, pushing the country’s debt-to-GDP ratio to 50.8%.
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