Confused Buhari Seeks Debt Relief While Seeking to Borrow Another $6.1Bn

President Muhammadu Buhari on Tuesday in Paris, France, called on European countries and global financial institutions to consider debt relief for African countries.

He said this would assist in reducing the devastating effect of the Coronavirus pandemic on the countries.

The proposition by President Muhammadu Buhari seems rather ironic as the President has written to the Senate to approve the borrowing another $6.1billion from bilateral and multilateral organisations to fund the deficit in the 2021 budget.

The President of the Senate, Ahmad Lawan, read the letter during the plenary session of the upper legislative chamber on Tuesday.

Using the $1 to N379 exchange rate, the new loan will amount to about N2.343 trillion.

The 2021 budget has a deficit of N5.6trillion.

Mr Buhari disclosed that the National Assembly already approved the borrowing of N4.6 trillion in the 2021 Appropriation Act.

He noted that the new borrowing of N2.3 trillion will part-finance the deficit in the 2021 budget.

“The 2021 Appropriation Act provides for N4,686,775,885,696.00 as New Borrowings (item No. 328) to part-finance the 2021 Fiscal Deficit, of which 50% or N2,343,387,942,848.00 (about USD 6,183,081 ,643.40 at the Budget Exchange Rate of USD1.00/N379) is specified as New External Borrowing,” Buhari’s letter reads in part.

Buhari while making a case for debt relief in France said ; “It is in this vein that we solicit the support of the French government with its influence in the European Union to lend its voice to the efforts being made to mobilise additional resources for developing economies most especially Africa in order to strengthen the quantum of investments to our economies.”

“This financial support should also be extended to the private sector.”

According to him, many African countries were already experiencing debt distress and the Debt Service Suspension by France and G-20 does not go far enough, adding that there was a need for more sustainable and affordable financing solutions, including debt relief and further debt restructuring.

On the Paris Agreement for Climate Change, President Buhari noted that African countries would need financial support for green energy investment and COP-26.

He said Nigeria will refocus on gas while adopting a Strategic Revenue Growth Initiative.