Nigeria to restructure $53 billion in loans to weather economic slowdown

Africa’s largest economy is struggling with low revenues due to theft of crude oil in its oil-producing region. The oil theft cost him more than $2 billion in the first eight months of this year, according to a Senate investigation in November.

Economists say the Nigerian government is spending more money on debt repayments than on education and health, but Mr Buhari said his government had no choice but to borrow to get out of two recessions in the past seven years .

Buhari’s party has a majority in parliament, which has never rejected any of its requests for approval.

Nigeria’s economy has started to grow, but it is fragile and the performance of its dominant oil sector is weak.

Last month, Fitch downgraded Nigeria’s “B-” rating with a stable outlook, partly due to worsening debt servicing.

Sir. Buhari said the government owed the central bank 22.7 trillion naira ($51 billion) per December 19 in the form of temporary advances, which he described as “short-term or emergency funding to fund the revenue expected from the government”.

In a letter to Parliament dated December 20, Mr. Buhari sought the approval of another one trillion naira advance to the government from the central bank.

This comes on top of Buhari’s request this week for 819.5 billion naira ($2 billion) in additional spending for 2022 to be financed by local borrowing.

Nigeria’s total public debt rose 3% to $103.3 billion in the second quarter, driven by local borrowing. The budget deficit in relation to income has reached 74% this year and, according to data from the Ministry of Finance, may reach 111% next year.

The government has not disclosed the level of interest currently paid on debt due for restructuring.

($1 = 446.13 Naira)

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