As Africa’s biggest economy climbs out of recession, the government still requires more money to fund the budget. This was communicated on the floor of the senate as the letter seeking approval was read to the members of parliament. (source Reuters)
President Muhammadu Buhari is seeking approval from lawmakers in the senate for $5.5 billion to fund the budget deficit.
Nigeria’s economy grew in the second quarter, climbing out of its first recession in 25 years as oil revenues rose, but the pace of growth was slow, suggesting the recovery remains fragile.
Nigeria expects a shortfall of $7.5 billion in its record 7.44 trillion naira ($24.33 billion) 2017 budget, which it plans to offset with foreign loans.
A budget that was expected to be funded by oil proceeds, internally generated revenue and foreign loans is yet to be fully achieved and the loan is expected to fill the deficits.
This is also following the announcement from the Debt Management Office of the country’s intention to to issue at least a $2.5 billion Eurobond this year coupled with an earlier announcement by the Minister for finance on plans to refinance $3 billion worth of treasury bills denominated in the local currency.
Should this be approved, the foreign debt profile of the country to which there is already a public outcry as to the rate of foreign loans the country will further pile up of which a chunk of the country’s budget is currently servicing.