Nigeria's Debt Profile Rises As Buhari Seeks New Loan

President Muhammadu Buhari wants to borrow another U.S.$6.1 billion to fund the deficit in the 2021 national budget.

The government expects the budget deficit to be financed largely from foreign and local borrowings. In April 2021, the National Assembly approved a loan request of U.S.$2.7 billion, despite concerns about Nigeria's rising debt.

The government has been in talks with the World Bank for a U.S.$1.5 billion loan, but approval has been delayed due to concerns over reforms to its currency. The new borrowing will raise the country's debt stock to U.S.$80 billion. Experts have expressed concern as the country plans to sell some national assets to raise funds.

Nigeria is yet to see a recovery from the Covid-19 pandemic and the slump in the oil price, a commodity on which the country's economy rests. Buhari, at the Paris Summit, has called on European countries and global financial institutions to consider reducing the devastating effect of the coronavirus pandemic on African economies by restructuring debt portfolios, opting for complete relief.

Buhari says the fall in commodity prices as Covid-19 took a toll on the global economy further slowed growth in some countries and strained health facilities.