Senate Approves Buhari’s Request On $5.8bn External Borrowings

The Senate, on Wednesday, approved the loans to the tune of $5,803,364,553.50 and a grant component of $10m under the 2018-2020 External Borrowing (Rolling) Plan of the Federal Government.

The approval followed the consideration and adoption of a report by the Senate Committee on Local and Foreign Debts.

Chairman of the committee, Senator Clifford Ordia, in his presentation, said the $2,300,000,000 would be sourced from the World Bank, $2,300,000,000 from the German Consortium, $90,000,000 from the Islamic Development, 786,382,967 from the China Exim Bank, $276,981,586.50 from the Bank of China, and $50,000,000 from the International Fund for Agricultural Development.

Ordia recalled that President Muhammadu Buhari had in a communication dated May 6, 2021, requested the Senate to consider and approve the plan.

According to the lawmaker, the 2018-2020 External Borrowing (Rolling) Plan contained a request for approval in the sum of $36,837,281,256 plus €910,000,000 and Grant Component of $10,000,000.

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Ordia noted that a report was laid by his committee before the Senate in July 2021, recommending approval of the sum of $8,575,526,537 and €490,000,000.

The lawmaker further recalled that the Senate, in July 2021, approved financing for projects as recommended by the committee, while the committee continued further legislative action and consideration of the outstanding request.

He added that on September 15, 2021, the President of the Senate, Ahmad Lawan, read another communication from the President containing an addendum to the 2018-2020 External Borrowing (Rolling) Plan in the sum of $4,054,476,863, €710,000,000 and a grant component of $125,000,000 for various projects, and same was also referred to the Committee for further legislative action.

Consequently, Ordia stated that a second report was laid by the Local and Foreign Debts Committee before the Senate in November 2021, recommending approval of the sums of $16,229,577,718, €1,020,000,000, and a grant component of $125,000,000.

In accordance with the recommendation of the committee, the Senate in November 2021 approved the sum as financing for projects as recommended by the panel.

Ordia explained that the request for the approval of $5.8bn was part of the mandate of the committee in respect of the 2018-2020 External Borrowing (Rolling) plan.

The Committee on Local and Foreign Debts, in its observations, noted the genuine concerns of Nigerians about the level of sustainability and serviceability of Nigeria’s borrowing within the last decade.

It nevertheless reiterated its stance on the need for a more proactive and broad-based approach to revenue enhancement-related issues, adding that, “there are noticeable improvements in the country’s revenues.”

The committee underscored the need for rapid infrastructural and human capital development.

The committee also noted that the projects to be financed with the loan would have a great multiplier effect on stimulating economic growth through infrastructure development, job creation, poverty alleviation, health care, and improvement of the nation’s security architecture.

Meanwhile, the House approved the same loans and the grant earlier on Tuesday.