The Federal Government has secured external loans worth over $10 billion in the last two years, but only about $5 billion, roughly half of the secured amount, has been disbursed so far.
According to data from the Debt Management Office, these loans were contracted from multilateral organizations, regional financial institutions, and the International Capital Market through Eurobonds.
The current administration’s external borrowing journey began with a €103,896,806.66 facility from Agence France De Development for investment in the Digital and Creative Economy.
The loan agreement was signed on October 4, 2023, with an interest rate of 3.50 percent and a moratorium of seven years. It will mature on October 31, 2043. Out of the total loan amount, only €3.896 million ($4.211 million) has been disbursed so far.
Another loan was signed with UniCredit S.p.A., an Italian multinational banking group, for €425.698 million to supply six FA aircraft (Tranche A – Defence). The loan has an interest rate of 3.85 percent, a four-year moratorium, and a maturity date of April 17, 2037. However, it remains undisbursed.
The first loan from China under the present administration was from China Development Bank, which provided €883.451 million for the Kaduna-Zaria Rail project.
The loan agreement was signed on December 1, 2023, with an interest rate of 4.33 percent and a moratorium of five years. It will mature on April 20, 2040. So far, only €245.198 million ($265.010 million) has been disbursed.
On the same day, the government signed a World Bank loan (International Bank for Reconstruction and Development) for Power Sector Recovery Performance-Based Operations (IBRD 1) amounting to $449 million.
The loan has an interest rate of 6.27 percent, a moratorium of four years, and will mature on April 1, 2058. Available data indicates that only $1.112 million has been disbursed so far.
Additionally, the International Development Association arm of the World Bank provided two loans: XDR 521.300 million for the Adolescent Girls Initiative for Learning and Empowerment AF with a 2 percent interest rate and a six-year moratorium, maturing on August 15, 2053; and XDR 371.200 million for the Nigeria for Women Scale-Up Project with a 2 percent interest rate and a five-year moratorium, maturing on February 15, 2053. Only XDR 41.345 million ($54.828 million) and an undisclosed amount for the latter have been disbursed so far.
The Islamic Development Bank also signed a loan agreement for ISD 3.560 million for Investment in Digital and Creative project IDB at an interest rate of 5.46 percent, with a moratorium of five years and a maturity date of December 31, 2046. So far, only ISD 703,229 ($932,552.16) has been disbursed.
