Nigerian Senate has approved President Muhammadu Buhari’s N850bn loan request to fund some projects in the 2020 budget.
The request was contained in a letter to the National Assembly, which was read by the Senate President, Ahmad Lawan, on Tuesday.
According to the letter, President Buhari seeks to raise the loan from the Domestic Capital Market to ensure adequate funds to finance projects in the budget.
The president stated that borrowing from the international market is unattractive because of the COVID-19 pandemic and falling oil prices.
He stressed;
Furthermore the senate may wish to know that the borrowing from the external capital market increases Nigeria’s external reserves, provides access to lower cost and as well as avoids crowding out of private sector borrowers who wish to access the domestic capital market.
President in his letter, added that;
However, recent developments in the global economic environment as a result of the coronavirus pandemic and the decline in international oil prices has made it less attractive to borrow from the international market at this time.
According to the letter, Buhari requested that;
To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget, I hereby seek the senate’s approval by resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of the international capital market.
The Senate approved the loan after giving it “speedy consideration”, suspending its relevant orders of approval.
The Senate Committees on Finance and Appropriation was asked to liaise with the Minister of Finance, Budget, and National Planning, Zainab Ahmed, to get more details on the loan request.
