Nigeria Secures $10 Billion Loans From Multilateral Organisations [See Details]

The Federal Government has contracted over $10 billion in external loans in the last two years, according to data from the Debt Management Office (DMO).

However, only about $5 billion, half of the secured loans, have been disbursed so far,.

According to the DMO, the loans were sourced from multilateral organisations, regional financial institutions, and the International Capital Market through Eurobonds.

A breakdown showed that the current administration began its external borrowing with a facility from Agence France De Development valued at €103.9 million for the Digital and Creative Economy (i-DICE) project.

Signed on October 4, 2023, the loan carries a 3.5 per cent interest rate, a seven-year moratorium, and matures on October 31, 2043. Out of the total, only €3.9 million ($4.2 million) has been disbursed.

The Federal Government also signed a loan agreement with UniCredit S.p.A., an Italian multinational banking group, for €425.7 million to supply six FA aircraft (Tranche A – Defence).

The loan carries a 3.85 per cent interest rate, a four-year moratorium, and matures on April 17, 2037. So far, it remains undisbursed.

From China, the administration secured €883.5 million from the China Development Bank for the Kaduna-Zaria rail project. Signed on December 1, 2023, it carries a 4.33 per cent interest rate, a five-year moratorium, and matures on April 20, 2040.

To date, only €245.2 million ($265 million) has been disbursed.

World Bank Facilities

On the same December day, Nigeria signed a $449 million World Bank loan (International Bank for Reconstruction and Development) for the Power Sector Recovery Performance-Based Operations.

The facility carries a 6.27 per cent interest rate, a four-year moratorium, and matures on April 1, 2058. Disbursement so far stands at just $1.1 million.

The International Development Association (IDA) arm of the World Bank also approved two loans:

• XDR 521.3 million for the Adolescent Girls Initiative for Learning and Empowerment (AGILE AF), with 2 per cent interest and a six-year moratorium. It matures on August 15, 2053. Disbursement so far is XDR 41.3 million ($54.8 million).
• XDR 371.2 million for the Nigeria for Women Scale-Up Project, also at 2 per cent interest with a five-year moratorium. It matures on February 15, 2053.

In addition, the Islamic Development Bank signed a facility of ISD 3.56 million for the i-DICE project.

the loan carries a 5.46 per cent interest rate, a five-year moratorium, and matures on December 31, 2046.

So far, only ISD 703,229 ($932,552.16) has been disbursed.