President Bola Tinubu has formally requested approval from the National Assembly to secure a fresh loan of N1.767 trillion to address the significant budget deficit of N9.7 trillion in the 2024 budget. This loan is part of the 2024 appropriation act and aims to reduce the deficit to N8 trillion. The request was presented to the House of Representatives by Speaker Tajudeen Abbas during Tuesday’s plenary session.
However, by April 2024, the naira had plummeted to N1,278/$1, resulting in a N478 difference from the projected rate. This decline led to a substantial loss of $13.45 billion, considering the fixed rates. As of November, the naira trades at N1,652.25/$1, exceeding the government’s initial projection by over 100%.If approved, this loan will contribute to Nigeria’s escalating debt profile, which currently stands at N138 trillion.
The proposed loan consists of Eurobonds and Sukuk offerings, valued at $1.7 billion and $500 million, respectively. Meanwhile, the presidency has submitted a N47.9 trillion budget for 2025, pegging the exchange rate at N1,400/$1. However, considering the true market rate, the budget’s dollar value is approximately $28.991 billion, making it smaller than the 2023 budget due to the declining naira value.
