Are Loans The Answer for Nigeria's Goals?

The Senate has approved external borrowing plans of more than U.S.$8.3 billion from international lenders including the World Bank for infrastructure projects. The lawmakers also approved a separate €490 million loan request by the president and will come from the French Development Agency and European Investment Bank. The government expects the budget deficit to be financed largely from foreign and local borrowings.

The Senate committee said it is aware of concerns over Nigeria's debt sustainability and that debt service accounted for over 30% of the country's expenditure and is proving to be a drain on revenue. The committee said it had to pass deficit budgets every year, borrowing to finance the gap "due to the shortfall in our annual revenues in relation to our need for rapid infrastructural and human capital development". The new borrowing will raise the country's debt stock to over U.S.$80 billion as the government continues to seek funding to meet annual budget deficits.

In April 2021, the National Assembly approved loans requests of U.S.$1.5 billion and €995 million for the Buhari administration. A U.S.$6.1 billion loan request made by President Muhammadu Buhari in May 2021, was approved by the National Assembly in early July 2021, to fund a deficit in the national budget. The Senate also passed a U.S.$2.4 billion supplementary budget to address rising insecurity in the country and fund Covid-19 vaccines.