President Bola Tinubu has formally requested the National Assembly’s approval for a new external borrowing of N1.77 trillion (approximately USD2.21 billion) as outlined in the 2024 Appropriation Act. The funds aim to address the budget deficit and finance critical projects across priority sectors of the Nigerian economy. Details of the Borrowing Request In a letter dated November 15, 2024, and read by Speaker Tajudeen Abbas on November 19 during plenary, President Tinubu cited compliance with Sections 21(1) and 27(1) of the Debt Management Office (DMO) Act, 2003, and the Federal Executive Council’s approval. The President stated: Funding Plan The borrowing will be raised through three primary channels: The President emphasized that all options would be evaluated simultaneously to ensure optimal costs and benefits. However, priority will be given to Eurobond issuance, given its faster execution and higher potential returns. Utilization of Funds The proceeds will be allocated to key sectors, including: Additionally, the funds will boost Nigeria’s external reserves through deposits in the Central Bank of Nigeria, providing further support for the naira exchange rate. Terms and Conditions The President assured the House that the Federal Ministry of Finance and the Debt Management Office (DMO) would work with transaction advisers to secure the best possible terms based on prevailing market conditions. The final terms, including interest rates and tenors, will be determined during issuance. Resolution Required from the National Assembly To implement the borrowing plan, the National Assembly’s resolution is needed to: Key Takeaways President Tinubu’s request highlights Nigeria’s strategic approach to securing funds for development while maintaining fiscal discipline. The administration aims to address critical infrastructure gaps and stabilize the economy through these external loans. READ ALSO:
