FOLLOWING a second attempt by the Nigerian President Muhammadu Buhari to obtain approval from the National Assembly for $30 billion dollars loan earlier rejected by Bukola Saraki-led 8th National Assembly in 2016, Nigeria may be heading into a perpetual debt trap.
In 2016, Buhari sought the approval of the National Assembly for a $29.96 billion dollars loan, saying the external loan was targeted to fund projects across all sectors with an emphasis on infrastructure.
The president was quoted saying the loan made up of proposed projects and programs loan of $11.274 billion, special national infrastructure projects $10.686 billion, Euro bonds of $4.5 billion and Federal Government budget support of $3.5 billion.
On Wednesday, during the ‘Fall 2019 issue of the regional economic outlook for Sub-Saharan Africa’ in Lagos, the International Monetary Fund (IMF) Senior Resident Representative and Mission Chief for Nigeria, Amine Mati said Nigeria’s debt has increased.
The ICIR takes a look at the external debt profile of Nigeria since June 2015 when former President Goodluck Jonathan vacated the seat for his successor.
Buhari inherited a national foreign debt of $10.3 billion in June 2015 from the immediate past administration by 30th June 2016, the nation’s loan later rose to $11.3 billion dollars.
This represented a 9.2 per cent increase in the National debt of the country.
By June 2017, Nigeria’s foreign debt grew from $11.3 billion to $15.0 billion representing a total of 33.6 per cent increase compared to the figures in 2016.
Fast forward to 2018, from the $15.0 billion dollars, the external debt skyrocketed to $22.1 billion dollars making up to 46.8 per cent increase in foreign debt.
As at the end of the 2nd quarter of 2019, the arguably largest economy in Africa, Nigeria’s external debt increased to $27.2 billion dollars amounting to 23.0 per cent increase in the year.
Therefore, between June 30, 2015, and June 30, 2019, spanning the four- year first term of Buhari, the nation’s foreign debt cumulated by 163. 2 per cent.
But the president is set to take in more borrows as a request for a fresh $30 billion has been sent to the Lower and Upper Chambers for approval.
Former House Committee on Local and Foreign debts, Shehu Sani, in reaction to the second bid of Buhari to obtain the loan said, the 8th Assembly ‘turned down the FG loan request for $30 Billion to save Nigeria from sinking into the dark gully of a perpetual debt trap’.
He added that it was an action taken to stop the country from being recolonised by creditor banks.