The Senate has given its nod to President Bola Ahmed Tinubu's request for a $6 billion loan to fund various infrastructure projects. The loan, which will be sourced from First Abu Dhabi Bank and Citibank London, will be used for debt servicing, port rehabilitation, and infrastructure development.
President Tinubu sought the approval of the Senate through two separate letters, one for a $5 billion loan and another for a $1 billion loan. The $5 billion loan will be used to raise Nigeria's total public debt from $110.3 billion to $115.3 billion.
The President stated that the $5 billion loan will be backed by naira-denominated securities and has a repayment tenure of 14 years. He also noted that the rehabilitation of the Lagos Port Complex and Tin Can Island Port will be funded by a $1 billion loan from Citibank London, which will be backed by UK Export Finance (UKEF).
The terms of the loan include a 1.1 percent availability fee and a 1.07 percent UKEF premium. Chairman of the Senate Committee on Foreign and Local Loans, Senator Aliyu Wamakko, said the committee had conducted extensive deliberations on the requests before presenting its report to the Senate for approval.
The Senate's approval of President Tinubu's $6 billion loan request raises concerns about Nigeria's growing public debt. The loan will increase Nigeria's total public debt by $5 billion, taking it to $115.3 billion. This sharp increase in debt will have significant implications for Nigerians, who will bear the burden of repayment over the next 14 years.
