(Bloomberg) -- Nigeria's Senate approved President Muhammadu Buhari's plan to borrow $22.7 billion from external creditors to finance infrastructure projects.
Lawmakers gave their endorsement to the government during Thursday's proceedings in the capital, Abuja, to seek the funding expected from the Islamic Development Bank, the African Development Bank, the World Bank and creditors in China, Japan and Germany. “The loans will have a positive influence on the GDP of this country,” Senate President Ahmed Lawan said.
The government will use the money to expand the railways, build a new hydro power dam and fund special intervention projects across the West African nation, according to a letter sent to the parliament in November.
While Nigeria's outstanding loans amount to about about a quarter of its economic output, Africa's largest oil producer spends more than half of its revenue servicing debts. The International Monetary Fund has warned that without major revenue reforms, the debts could rise to almost 36% of GDP by 2024, with interest payments taking as much as 75% of government revenue.
To contact the reporter on this story: Anthony Osae-Brown in Lagos at aosaebrown2@bloomberg.net
To contact the editors responsible for this story: Paul Richardson at pmrichardson@bloomberg.net, Dulue Mbachu
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