FG mulls fresh N7.24tn loan to stabilise economy

Nigeria’s government may borrow an additional N7.24 trillion in 2024 to fund an intervention plan aimed at reviving its economy.

This was revealed during a presentation by Wale Edun, the minister of finance and coordinating minister of the economy, on an Accelerated Stabilisation and Advancement Plan (ASAP). The plan aims to address critical challenges affecting the reform initiatives and stimulate development in various sectors of the economy.

In the 2024 approved budget, the government’s deficit was N9.18 trillion, to be partially financed by N7.83 trillion in new borrowings.

However, according to the ASAP, the government intends to borrow N9.18 trillion to fund its deficit in the year. The intervention financing will add N7.24 trillion to the debt, bringing the total for 2024 to N16.42 trillion. Debt financing is projected to cost N8.81 trillion.

According to the Debt Management Office, Nigeria’s total public debt was N97 trillion as of December 2023. With the new borrowing, total debt is set to rise to N113.4 trillion. This additional borrowing is anticipated due to expected revenue shortfalls, and the government acknowledges that the incremental spending from the intervention funding could negatively impact leverage metrics if entirely funded by additional borrowing only.