Despite the country groaning under the huge burden of loan which the administration of President Muhammadu Buhari has brought on the country, the National Assembly recently approved the president’s request for loans totalling $5,803,364,553.50 and a grant component of $10 million under the 2018-2020 External Borrowing (Rolling) Plan of the federal government.

The president had in a communication to the National Assembly dated May 6, 2021, requested the Senate to consider and approve the plan.

The Senate was the first to approve the loan following the consideration and adoption of a report by the Senate Committee on Local and Foreign Debts.

The plan contained a request for approval of the sum of $36,837,281,256 plus €910 million and a grant component of $10 million.

The Chairman of the committee, Senator Clifford Ordia, said $2.30 billion would be sourced from the World Bank, another $2.30 billion from the German Consortium, $90,000,000 from the Islamic Development, $786,382,967 from the China Exim Bank, $276,981,586.50 from the Bank of China, and $50million from the International Fund for Agricultural Development.

He noted that a report was laid by his committee before the Senate in July 2021, recommending the approval of the sum of $8,575,526,537 and €490ml million.

Ordia recalled that the Senate, in July 2021, approved financing for projects as recommended by the committee, while the committee continued further legislative action and consideration of the outstanding request.

He added that on September 15, 2021, the President of the Senate, Dr. Ahmad Lawan, read another communication from the Buhari containing an addendum to the 2018-2020 External Borrowing (Rolling) Plan in the sum of $4,054,476,863, €710 million and a grant component of $125 million for various projects, and same was also referred to the committee for further legislative action.

Ordia stressed that the second report was laid by the committee before the Senate in November 2021, recommending the approval of the sums of $16,229,577,718, €1.02 billion and a grant component of $125 million.

He explained that the request for the approval of $5.8 billion was part of the mandate of the committee in respect of the 2018-2020 External Borrowing (Rolling) Plan.

The committee noted the genuine concerns of Nigerians about the level of sustainability and serviceability of Nigeria’s borrowing within the last decade.

It reiterated its stance on the need for a more proactive and broad-based approach to revenue enhancement-related issues, adding, “there are noticeable improvements in the country’s revenues.”

The House of Representatives also at plenary, approved Buhari’s loan request, following the consideration and adoption of a report presented by the Chairman, House Committee on Aids, Loans and Debt Management, Hon. Ahmed Safana.

Rising Debt Profile

Unlike any other administration since 1999, Nigeria’s public debt has risen the most under the Buhari administration.

Analysis of the government’s domestic and foreign debts has shown the country’s debt has grown three times more than the cumulative figure recorded by the past three administrations.

In the last six years of Buhari’s administration, governments at the Federal and State levels have accumulated borrowings to the tune of, at least, N23.34 trillion.

Between 2015 and 2016, the debt increased by 34.4%. In 2017 it was increased by 20%; it was the increase by 10% in 2018; in 2019, the debt of the country increased by 14.6%; in 2020 it was increased by 25.4% and 10.1% in 2021.

When President Olusegun Obasanjo assumed office in 1999, he met a debt of $28 billion, but left $2.11 billion in 2007 after successfully securing debt relief from the London and Paris clubs of foreign creditors.

The Yar’Adua/Jonathan government added $1.39 billion to what they met. It’s important to note that President Goodluck Jonathan completed the tenure from May 2010 to May 2011 after the death of his boss, Yar’Adua.

Within 12 months of Jonathan’s reign, there was an increase in the federal government’s debt from N4.94 trillion to N6.17 trillion.

By May 2011 when Jonathan was elected to serve a fresh term in office, Nigeria’s foreign debt was $3.5 billion and by the time he left office in 2015, it went up to $7.35 billion.

Under the Buhari administration, the country’s external loan hit $28.57 billion by December 2020. This means that an extra $21.27 billion was accumulated.

In December 2020, Nigeria’s domestic debt stood at N16.02 trillion, with the current administration’s appetite for borrowing still increasing.

Regrettably, debt service obligations gulped 97 per cent of the Nigerian government’s total revenue in 2020.

According to a civic-tech non-profit organisation, Budgit, in its July report, of the N3.42 trillion generated as revenue, Nigeria spent N3.34 trillion

Also, N3.3 trillion was set aside for debt servicing in the assented 2021 budget, about a quarter (24.3 per cent) of the entire N13.6 trillion total expenditure.

Recall that the sum of N1.6 trillion was proposed for servicing debts out of the total (N7.3 trillion) budgeted for 2017. In 2018, the figure rose as N2.2 trillion or 24.17 per cent was pegged for debt servicing in the N9.1 trillion budget.

Moreso, in 2019, the government proposed to spend 24 per cent (N2.14 trillion) of the N8.9 trillion expenditure on debt service.

Analysts have however expressed worry that the country’s loan is already unsustainable because it is taking 95 to 97 per cent of annual revenue generated.

Dataphyte analysis revealed that 38% of the 2022 budget would be financed by loans.

The federal government spent N2.02 trilllion on debt servicing in the first six months of 2021. This figure represents 90.58 per cent of the total revenue of N2.23 trillion generated by the FG within the period.

Similarly, the federal government is projecting a sum of N3.61 trillion to be spent on debt servicing in 2022. This means over 22% of the year’s budget is already projected to be earmarked for debt servicing.

The Debt Management Office, claimed that Buhari’s administration inherited N12 trillion though the total debt stock hovers around N40 trillion.

There are fears that by the time Buhari leaves office in May, 2023, the country may be unable to finance the loans that would have been accumulated by his government.