Economy

Rising Debts: IMF Warning and Buhari’s Fresh Demand for $30m Loan

Published

7 years ago

November 30, 2019

Eric

By Eric Elezuo

Barely 24 hours after the International Monetary Fund (IMF) issued a warning to Nigeria against rising debts, President Muhammadu Buhari re-sent the $29.96bn 2016-2018 external borrowing plan to the Senate for its consideration and approval, saying that earnings from oil was not enough. The President’s financial plan was approved by the Federal Executive Council in August 2016 and sent to the 8th Assembly in September 2016. But the request was rejected and thrown out by the Dr. Bukola Saraki-led National Assembly in November of the same year.

The Debt Management Office has said out of Nigeria’s total debt profile of N25.7tn as of June 2019, external borrowing accounts for about 32 per cent while the 68 per cent is domestic.

Reading the fresh request on the floor of the Senate during plenary, the Senate President, Ahmed Lawan failed to give details of the executive communication. it is however, on record that Buhari has asked for the loan approval in 2016 to help in funding infrastructure plans from 2016 to 2018.

The letter, dated November 26, 2019, Buhari noted as follows:

“Pursuant to Section 21 and 27 of the Debt Management Office (Establishment) Act, I hereby request for Resolutions of the Senate to approve the Federal Government’s 2016 – 2018 External Borrowing plan, as well as relevant projects under this plan.

“Specifically, the Senate is invited to note that: While I had transmitted the 2016-2018 External Borrowing Plan to the 8th National Assembly in September, 2016, this plan was not approved in its entirety by the Legislature.

“Only the Federal Government’s Emergency projects for the North East, (Four (4) States’ projects and one (1) China Exam Bank Assisted Railway Modernisation Projects for Lagos – Ibadan Segment) were approved, out of a total of thirty-nine (39) projects.

“The Outstanding projects in the plan that were not approved by the Legislature are, nevertheless, critical to the delivery of the Government’s policies and programmes relating to power, mining, roads, agriculture, health, water and educational sectors.

“These outstanding projects are well advanced in terms of their preparation, consistent with the 2016 Debt Sustainability Analysis undertaken by the Debt Management Office and were approved by the Federal Executive Council in August 2016 under the 2016 – 2018 External Borrowing Plan.

“Accordingly, I have attached, for your kind consideration, relevant information from the Honourable Minister of Finance, Budget and National Planning the specific outstanding projects under the 2016 – 2018 External Borrowing plan for which legislative approval is currently sought.

“I have also directed the Minister to make herself available to provide any additional information or clarification which you may require to facilitate prompt approval of the outstanding projects under this plan.”

Defending the request, which stakeholders have roundly condemned across board, Buhari insisted that it was necessary to resort to external borrowing to fund the financial gap required to address the huge infrastructural deficit in the country such as power, railway, road projects, assuring lawmakers of his resolve to implement the projects in a financially sustainable manner.

Breaking down the total cost of implementing the projects, which stands at $29.960 billion, the President’s letter informed that Projects and Programme loan will gulp $11.274 billion while Special National Infrastructure Projects will take $10.686 billion. There is also Euro Bonds of $4.5 billion and Federal Government Budget Support of $3.5 billion.

He clarified that the projects would be implemented across the 36 States of the Federation and the Federal Capital Territory and revealed that the projects and programmes were selected after positive technical economic evaluation and presumed contribution to the socio-economic development of the country.

Some Nigerians have wondered the rationale behind incurring more debts, especially given the IMF’s elaborate warnings on rising debt. Many others have knocked the Federal Government for the timing of the loan request, saying it lacked foresight for economic analysis.

In its reaction, the Centre for Social Justice through its Lead Director, Eze Onyekpere, condemned Buhari fresh moves, saying that rather than continue to rely on borrowing to finance its activities, the Federal Government should adopt other sources of funding the infrastructure needs of the country

“The rising debt service of N2.45tn appears to be crowding out expenditure in critical infrastructure and human development. At the end of the day, if there is a shortfall in revenue, salaries and overheads will be drawn down, debts will be serviced whilst capital projects suffer.

“At 23.74 per cent of overall expenditure, the debt service is high and it is higher than capital expenditure. When the Sinking Fund of N296bn is added to debt service, it comes up to N2.746tn which is 26.61 per cent of the overall budget.

The Centre maintained that the Federal Government should broaden the sources of revenue for budget and programme funding in order to check the high rate of debt burden.

The Punch reported that the Director-General of NECA, Mr Timothy Olawale, described the trend of Nigeria’s rising debt profile as ‘disturbing’, stating that the figures released by the Debt Management Office earlier in the year showed that the Federal Government’s domestic debt profile rose to N15.814tn in September, 2018 from N15.629tn in June, 2018 (1.19% increase). He foresee a situation where the trend takes a toll on the developmental capacity of Nigeria despite government’s financial managers’ argument that the rate of increase is within a manageable limit as a chunk of the 2020 budget would be used for debt servicing rather than developmental projects.

According to him, the “bourgeoning debt profile calls for concern as our appetite for debt skyrockets,” and likely to have a catastrophic outcome for the nation in the long run.

He advised the federal and state governments, to as a matter of urgency, take deliberate steps aimed at cutting the cost of governance and recurrent expenditure.

A former Director-General, Abuja Chamber of Commerce and Industry, Mr. Chijioke Ekechukwu, said the rising debt portended danger for the economy just as the Nigeria Employers’ Consultative Association expressed fear over the mounting debt burdens of the nation.

In the same vein, the Registrar Chartered Institute of Finance and Control of Nigeria, Mr Godwin Eohoi, said that with the Federal Government spending about 20 per cent of its budget size servicing the country’s debt, any further plan to increase the country’s debt profile might result in a debt crisis.

For Mr ‘Laoye Jaiyeola of the NESG, further borrowing should only be used to develop critical infrastructure as the country was already spending so much on recurrent expenditure.

“If by this time, we are still borrowing and spending 80 per cent of our budget on recurrent expenditure and overheads, it means we are not serious.

“When you are borrowing, make sure you are creating good roads, investing in education and health. Healthy people will bring about more money. So, it is a challenge. We don’t have enough to service our debts but again, we have to see how we can grow.”

The ball now lies in the court of Lawan’s ninth Senate to either understand the plight of the Nigerian economy or tow the line of Buhari’s Federal Government and approve the loan. Though the senate has promised to consider the request based on merit, Nigerians however, harbour the fear that the loan request may be granted even without consideration. This is because the Senate President had earlier hinted that whatever request presented by Buhari to the National Assembly is for the good of Nigerians and will receive express approval.

But cautioning the lawmakers to be well guided, the chairman of the Senate Committee on Local and Foreign Debt in the 8th National Assembly, Senator Shehu Sani, said “We turned down the Federal Government loan request of $29.96bn to save Nigeria from sinking into the dark gully of a perpetual debt trap.”

He that “We don’t want our country to be recolonised by creditor banks. If we had approved that loan request, our external debt could have catapulted to over $52bn and that is not sustainable.

“With the current escalation of borrowing, we will be walking into debt slavery and move from landlords to tenants in our own country.

“They will always tell you that even America is borrowing and I don’t know how rational it is to keep on borrowing because another country is borrowing.

“If we keep listening to bankers and contractors, we will keep borrowing and burying ourselves and leave behind for our children a legacy of debt burden.

“Loans are not charities. Most of those encouraging more borrowing are parasitic consultants, commission agents, rent-seeking fronts and contractors.”

All eyes are now on Ahmed Lawan, who many has described as a rubber stamp of the Buhari-led executive, for the next move.

Economy

Dangote Refinery Files Lawsuit Against FG, NNPC, Marketers over Petrol Import Licences

Published

1 month ago

May 18, 2026

Eric

Dangote Petroleum Refinery has filed a fresh lawsuit against the Nigerian National Petroleum Company Limited (NNPC) and several fuel marketers, seeking to overturn fuel import licences issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

According to court documents filed at the Federal High Court in Lagos and cited by Reuters, the refinery is asking the court to nullify import permits recently granted or renewed by the regulator, arguing that the approvals violate an earlier directive ordering all parties to maintain the status quo pending the determination of the case.

The legal action comes at a time when Nigeria is recording a sharp decline in petrol imports due to rising domestic refining capacity, largely driven by output from the Dangote Refinery.

In its filing, Dangote Refinery argued that Nigerian law permits fuel importation only when local production is unable to meet national demand. The company maintained that continued issuance of import licences undermines its operations as it ramps up production from its multi-billion-dollar refinery located on the outskirts of Lagos.

Fuel marketers, however, have consistently defended importation, insisting that imports remain necessary to guarantee a stable supply and prevent shortages across the country.

This is not the first dispute between Dangote Refinery and fuel importers. In 2025, the company filed a similar suit against NNPC Ltd and several marketers, including AYM Shafa Ltd, A.A. Rano Ltd, T. Time Petroleum Ltd, 2015 Petroleum Ltd and Matrix Petroleum Services Ltd, while also seeking ₦100 billion in damages. The suit was later withdrawn without explanation.

Recent industry data showed petrol imports dropped to 965.52 million litres in Q1 2026 from 2.43 billion litres in the same period of 2025. Meanwhile, supply from local refineries rose to 3.18 billion litres, accounting for about 76.7 percent of Nigeria’s petrol supply during the quarter.

Economy

World Bank Flags ‘Hidden Spending System’ Diverting N34.53trn of Nigeria’s Revenue

Published

2 months ago

April 19, 2026

Eric

The World Bank has raised concerns over Nigeria’s fiscal framework, revealing that more than N34.53 trillion was diverted from federation revenue over the past three years through pre-distribution deductions.

In its latest Nigeria Development Update obtained from its website, the global lender disclosed that although total federation revenue rose sharply to about N84 trillion between 2023 and 2025, about 41 per cent of the earnings did not reach the Federation Account for distribution to the federal, state and local governments.

According to the report, gross revenue increased from N17.08 trillion in 2023 to an estimated N37.44 trillion in 2025. However, deductions classified as “first-line charges” also rose significantly, from N6.22 trillion to nearly N15 trillion within the same period, reducing the pool of funds available for distribution.

The World Bank noted that the development has created a paradox in which rising revenues have not translated into improved public spending capacity, as a substantial portion is automatically retained by certain agencies before allocation.

It explained that reforms such as the removal of petrol subsidy and foreign exchange adjustments boosted nominal revenues, but much of the gains were offset by the structure of deductions tied to cost of collection and statutory transfers.

Agencies such as the Nigeria Customs Service, Nigerian National Petroleum Company Limited, and the Federal Inland Revenue Service account for a significant portion of these deductions. The report stated that their funding is based on fixed percentages of gross revenue, leading to higher allocations as revenues increase.

Describing the model as “pro-cyclical”, the Bretton Woods institution said it operates outside the conventional budgetary framework and weakens legislative oversight. In some cases, allocations to individual agencies exceed the revenues of several states and even the budgets of key federal ministries.

The report also highlighted the impact on public finances, noting a decline in capital expenditure from N5.5 trillion in 2024 to N4.5 trillion in 2025, with only about 25 per cent of the approved capital budget implemented. Meanwhile, the federal fiscal deficit remained elevated at N16.9 trillion, driven by debt servicing and recurrent expenditure.

The World Bank warned that the current arrangement undermines fiscal transparency and accountability, as significant portions of public revenue are spent outside the standard appropriation process.

Source: tribuneonline

Economy

Dangote Refinery Raises Petrol Price to N1,275, Diesel Now N1,950

Published

3 months ago

April 8, 2026

Eric

The Dangote Petroleum Refinery has increased the gantry price of petrol and diesel, further tightening pressure on consumers and businesses across Nigeria. This is however, in response to the rising geopolitical tensions in the Middle East and their ripple effects on global energy markets.

A top official at the refinery, who confirmed the development to our correspondent on Tuesday night, said the facility adjusted its pricing in response to prevailing international crude oil benchmarks and market realities.

The new pricing template shows that petrol rose by N75 per litre to N1,275, representing an increase of about 5.02 per cent, while diesel jumped by N200 per litre to N1,950.

This marks a sharp increase from last month’s prices of N1,200 per litre for petrol and N1,750 for diesel, signalling that diesel is now on track to breach the N2,000 per litre mark at the pump, further intensifying cost pressures across the economy.

“The adjustment is in line with global market trends. You are aware of the ongoing tensions in the Middle East and how they have impacted crude oil prices. These are external factors that directly influence refined product pricing,” the official, who spoke in confidence due to the lack of authorisation to speak on the matter, stated.

He added, “Petrol has been reviewed upward by N75 to N1,275 per litre, which is about a five per cent increase, while diesel has increased more significantly by N200 to N1,950 per litre. These changes reflect the realities of the international market.”

Market data from Petroleumprice.ng corroborated the development, indicating that the latest petrol price reflects a 5.02 per cent increase at the gantry level.

The development comes at a time when stakeholders had hoped that increased local refining capacity would help stabilise domestic fuel prices. However, analysts say Nigeria remains exposed to global oil price volatility due to its reliance on international crude benchmarks for pricing.

The latest hike could trigger a fresh wave of increases in pump prices nationwide, with marketers expected to pass on the additional cost to consumers in the coming days.

Global oil markets have remained volatile in recent weeks due to escalating tensions in the Middle East, a region that accounts for a significant share of the world’s crude oil supply. Any disruption or perceived risk to supply routes often leads to price spikes, which in turn affect refined petroleum products globally.

Nigeria, despite being an oil-producing country, operates a deregulated downstream sector where fuel prices are largely determined by market forces. This means that local prices are influenced by international crude prices, exchange rates, logistics costs, and refinery operations.

The Dangote Petroleum Refinery, Africa’s largest, was expected to reduce Nigeria’s dependence on imported fuel and help stabilise prices. However, experts note that as long as crude oil pricing remains tied to global benchmarks, domestic fuel prices will continue to fluctuate in response to international developments.

The latest increase also comes amid concerns over affordability, with consumers already grappling with high energy and transportation costs. A sustained price increase could worsen inflationary pressures and slow economic recovery.