Nigeria owes N38tr, seeks new $ 5.8 billion external loan, $ 10 million grant | The Guardian Nigeria News

• AfDB Approves New $ 210 Million Loan for Nigeria’s Agro-Industrial Transformation Projects
• DMO: FG must adopt a major revenue campaign to reduce the increase in debt and new borrowing
• Senators are experts in loan approval without scrutiny, says Sani

Nigeria’s total public debt in the third quarter of September 2021 was N38.005 trillion, the Debt Management Bureau (DMO) said.

This was leaked in a press release titled “DMO Releases Total Public Debt for Third Quarter 2021” on the DMO website yesterday.

It reads: “In accordance with its practice, the Debt Management Office has published Nigeria’s total public debt as of September 30, 2021. The data, which includes the total external and internal debts of the Federal Government of Nigeria, of 36 state and Federal Capital Territory governments, shows that Nigeria’s public debt was 38.005 trillion naira or $ 92.626 billion at the end of Q3 2021. “

The total stock of debt increased by 2.540 trillion naira in the three months from June 30, the end of the second quarter, to September 30, 2021.

The statement read in part: “The increase of 2.540 trillion naira from the corresponding figure of 35.465 billion naira at the end of the second quarter of 2021 is largely explained by the 4 billion dollars of Eurobonds issued by the government in September 2021. “

He added: “The issuance of $ 4 billion Eurobonds has brought significant benefits to the economy by increasing the level of Nigeria’s external reserves, thus supporting the exchange rate of the naira and providing the necessary capital. to allow the federal government to fund various projects in the budget. ”

The office further clarified that the $ 4 billion triple-tranche Eurobond, issued in September 2021, was intended to implement the new $ 6.18 billion external borrowing in the 2021 finance law.

Meanwhile, the House of Representatives approved President Muhammadu Buhari’s loan request for $ 5.8 billion and the grant of $ 10 million. Loans are to come from the World Bank, Islamic Development Bank, China Exim Bank, China Development Fund for Africa, and International Fund for Agricultural Development (IFAD).

In approving the loan, the House requested that the terms and conditions of the loan from the funding agencies be forwarded to the National Assembly for proper execution and praise.

The House Committee on AIDS, Loans and Debt Management presented its report through President Ahmed Safana (APC-Katsina).

Safana observed that the total loan of $ 5.8 billion covers $ 2.3 billion for the network modernization and extension program, $ 290 million for the malaria project, $ 700 million dollars for the sustainable water supply, sanitation and hygiene (WASH) project, $ 786,382,967 for the Gurara Phase II project. , among many others.

Safana said: “That the House approve the under-listed ongoing negotiation of external borrowing of $ 5,803,364,553.50 and a grant component of $ 10 million under the rolling external borrowing plan. 2018-2020. “

Likewise, the board of directors of the African Development Bank (AfDB) yesterday approved a loan of 210 million dollars to Nigeria to finance agro-industrial processing zones in different parts of the country. The loan will co-finance the first phase of Nigeria’s special agro-industrial processing zone program, according to a statement obtained from the bank.

The program is expected to unlock the potential of Nigeria’s agricultural sector and create jobs for citizens. It is designed to promote industrialization through the development of strategic crops and livestock.

According to the statement, the financing represents one of the bank’s most ambitious operations in terms of scale and scope to date. The facility consists of an ADB loan of $ 160 million and an Africa Growing Together Fund loan of $ 50 million.

The first phase of the project targets seven states and the CTF. The states and areas of intervention are Cross River (cocoa, rice and cassava); Imo (cattle and dairy farming); Kaduna (tomato, corn and ginger); and Kano (rice, tomato, peanuts and sesame oil).

Others are Kwara (cattle); Ogun (cassava, rice, poultry and peach); Oyo (cassava, soybeans and rice) and FCT (cattle and dairy farming).

According to the AfDB, the project will support Nigeria’s efforts to increase agricultural production, promote investment, create wealth and transform rural areas into economic hubs. He noted that the phase would be implemented with a total co-financing of $ 538.05 million from other partners.

AfDB Group President Dr Akinwumi Adesina said, “This first phase of the program is not government led. It is supported by the government and led by the private sector. This is the critical way you have the structural transformation of agriculture.

“It’s impressive to see a strong commitment from the Nigerian government – a very strong commitment from the Nigerian Minister of Finance and all state governments because they have to donate the land, they make sure all the regulations and incentives are there. provided. “

The Managing Director of the Bank’s Country Office in Nigeria, Lamin Barrow, said: “Phase 1 of Nigeria’s Agro-Industrial Processing Zones Special Program will leverage private sector investment in agro-industrial hubs and processing centers. agricultural transformation. It will affect some 1.5 million households as direct beneficiaries, with an objective of creating 400,000 direct jobs and up to 1.6 million indirect jobs.

The Islamic Development Bank and the International Fund for Agricultural Development will provide parallel co-financing for the projects while the federal and state governments will contribute cash and in-kind.

HOWEVER, the DMO has declared the need for the federal government to adopt a major revenue campaign to reduce the country’s growing debt and minimize new borrowing.

During the Coronation Merchant Bank’s 2021 virtual webinar on ‘Nigeria’s Debt Landscape: Opportunities for Investors’, held yesterday, DMO Managing Director Patience Oniha insisted that the government must give priority and invest heavily in sectors capable of generating increased income. like agriculture, mining and ICT to grow the economy.

Sectors with strong revenue drivers, she said, are better positioned to respond to the risks associated with any transformation and the urgency created by disruptive events.

She said Nigeria’s debt profile was on the rise due to the impact of the income collapse and crises that followed the coronavirus pandemic on the economy.

She argued that the borrowing rate started to decline until the COVID-19 crisis forced Nigeria, like many other countries, to increase borrowing to boost the economy and create more jobs. for the population.

“If we increase our income, debt service to income will be low and when that happens we won’t need to borrow more. The government can now fund various projects it needs.

The DMO boss also advocated that increased government collaboration with the private sector is needed to help finance investment projects, increase balance sheets and minimize debt financing.

Oniha admitted that the country’s growing insecurity poses a threat to the influx of investment, but said it remained a priority to attract the long-term capital needed to support the government’s initiative.

Also speaking, FMDQ Stock Exchange chairman and CEO Bola Onadele said the government needs to deploy a large part of its borrowing in the productive sector to spur growth.

He said: “Debt is sustainable when a country has the capacity and the size to meet its current and future payment obligations without external aid or default. Debt that is unsustainable has a negative impact on investment.

“It is important that any country trying to borrow has a repayment structure, as investors in the global market are looking at repayment capacities to see if the country is meeting the debt-to-income ratio.”
Senator Shehu Sani, who represented the Kaduna Central constituency at the Eighth National Assembly, described the current senators as sleepy senators specializing in approving loans to the president without scrutiny.

Speaking at a Delta State civil society event in Asaba yesterday, Sani said, “During our time in the National Assembly, requests for loans were carefully considered and seriously debated.

According to him, “the committee where I have people like Dino Melaye and Ben Bruce, we threw out loans that did not represent the generality of Nigerians.

“But now, in the space of two years, the National Assembly has approved over $ 30 billion in loans without serious debate. Currently, before the President sends out the loan application, it has already been approved without review.

“I say this because many have been in the House for years with no impact, no significant contribution, but people like us have spent four years and made an impact. We didn’t go there to learn, we were already professionals and we did what was necessary.

To get it right, he urged civil society organizations to convince the president to sign the electoral bill recently passed by the National Assembly.

Shirlene J. Manley