Foreign Loans Increased By 64% In 23 States

23 states in Nigeria grew bilateral loans by 64.26 per cent in six months to $462.81m as of the end of June, 2023.

Most loans on record were taken from China, India, France and other countries.

The Central Bank of Nigeria, as at June 2023, instructed Deposit Money Banks to remove the rate cap on the naira at the official Investors and Exporters’ Window of the foreign exchange market.

As a result, the naira fell from 471/$ to 750/$ as of the end of June 2023, and had continued to fall.

The increase in bilateral loans indicated a growing appetite for this type of loans by state governors. In the external debt data disclosed by the Debt Management Office, 23 states increased their borrowing from China (Exim Bank of China), India, France (Agence Francaise Development), Japan International Cooperation Agency, and Germany (Kreditanstalt Fur Wiederaufbua).

In 2018, a loan worth $475m was secured by Nigeria from France for the development of projects in Kano, Lagos, and Ogun states, signed by the then Minister of Finance, Mrs Kemi Adeosun, and the Chief Executive Officer of the Agence Francaise Development, Mr Rey Rioux.

The loan breakdown included a $200m loan facility grant to Lagos for the execution of transport projects by AFD, another $200m loan for land degradation project in Ogun State, and $75m for the execution of water projects in Kano State.