NIGERIA’s federal government is seeking the approval of the National Assembly for a $1.2bn loan from Brazil to finance its proposed agricultural programmes contained in the 2021 budget.
In August, President Muhammadu Buhari presented Nigeria’s most ambitious budget ever to the National Assembly when he unveiled a record-breaking N13trn ($33.68bn) package before lawmakers. Historically, Nigeria’s budget has averaged between $20bn and $25bn but for 2020, the federal government presented a radical one of $28.8bn and for 2021, President Buhari is seeking to surpass this.
However, with global crude oil demand and prices at an all time low due to the global economic slowdown as a result of the coronavirus lockdown, the government is cash-strapped. With over 90% of Nigerian government revenue coming from the proceeds of crude oil exports, the Buhari administration needs to resort to borrowing to fund its 2021 budgetary plans.
On Tuesday, finance minister Zainab Ahmed, appeared before the House of Representatives Committee on Finance in Abuja to defend her budget. She revealed that the federal government forwarded an approval request to the National Assembly for the loan from the Brazilian government to address issues in the agriculture value chain.
Ms Ahmed added that 100,000 hectares of land would be required in each state for food production, pointing out that link roads would be built in such locations to provide access for farmers to move farm produce to markets and reduce post-harvest losses. According to the finance minister, Nigeria’s total public debts would hit N38trn by December 2021 with this loan.
“For borrowing to improve industry, we are before the parliament. I request for the approval for loan that we call the Green Imperative Programme which is for loan of $1.2bn from the Brazilian government.
“It is a programme that is addressing the whole of agricultural value chain from mechanisation, production, processing and selling. It is meant to lend to businessmen for tractors, plants at all levels.”
“Our total public debt stock comprising the external and homes debts of the federal and state governments and the Federal Capital Territory stood at N31.01trn ($85.9bn) as at June 30, 2020. It is projected, based on existing approval, to rise to N32.51trn by December 31, 2020 and N38.68trn by December 31,2021,” Ms Ahmed said.