President Bola Tinubu has requested the National Assembly’s approval for a new external loan of N1.767 trillion as part of the 2024 budget to address a deficit of N9.7 trillion.
The request, read in a plenary session by the Speaker on Tuesday, also includes proposals for the Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) for 2025-2027.
Additionally, Tinubu introduced a bill to establish the National Social Investment Programme, positioning the social register as a core tool for federal welfare initiatives.
Meanwhile, Nigeria’s rising debt burden remains a concern. The Central Bank of Nigeria (CBN) reported that the federal government spent $3.58 billion on foreign debt service from January to September 2024, a 39.77% increase from the same period in 2023.
This year saw significant monthly spikes in debt payments, including a peak in May 2024 at $854.37 million, a 286.52% increase from May 2023.
Debt at the state level has also grown. As of mid-2024, the total debt of Nigeria’s 36 states rose to N11.47 trillion, reflecting a 14.57% increase from the N10.01 trillion recorded in late 2023.
Currency devaluation has intensified this issue, with naira debt figures rising from N4.15 trillion to N7.2 trillion. Domestic debt, however, saw a slight decline.
Lagos remains the state with the highest foreign debt, responsible for 26.9% of the total, amounting to $1.24 billion.
Analysis from BudgIT’s 2024 State of States report indicates an over-dependence of most states on federal allocations, with 32 states relying on the Federation Account Allocation Committee (FAAC) for at least 55% of their revenue.
In 2023, 14 states relied on federal funds for over 70% of their revenue, underscoring vulnerability to crude oil price fluctuations and other external economic shocks.
The BudgIT report calls attention to the fiscal challenges Nigerian states face, recommending a balance between internally generated revenue and federal transfers to build more sustainable economic frameworks at the sub-national level.
