President Muhammadu Buhari has requested the approval of the Senate for a fresh external borrowing of $5.513 billion. The request was contained in a communication read at plenary by the President of the Senate, Ahmad Lawan on Thursday.
Buhari says the external loan has become necessary to finance the revised 2020 budget in view of sharp decline in proceeds from crude oil. The money will also be used to “finance priority projects to address the impacts of Covid-19 as well as Nigeria’s food security challenges”. A substantial amount of the planned loan will also be used to support state government infrastructure development projects.
The external loan will be sourced mainly from the International Monetary Fund, IMF providing $3.4bn, World Bank $1.4bn, Africa Development Bank $500million and the Islamic Development Bank $113m. For priority projects of the Federal Government to address Covid-19 and improve food security, the Federal Government hopes to secure $600million from the Islamic Development Bank and another $125,00 million from the African Development to strengthen the heathcare system.
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The Senate subsequently refered the President’s request to the Committee on Local and Foreign Debt to revert back in one week.
Earlier, President Muhammadu Buhari in a similar communication had requested the Senate to approve revised versions of the Medium Term Expenditure Framework, MTEF, and the Appropriation Bill for 2020. Buhari says the review has become necessary in the light of sharp decline in oil price and cut in daily oil production occasioned by COVID 19.
A close look at the revised 2020 document showed Nigeria devalued the Naira by almost 18% while cutting down the size of its initial budget by N85 billion.
Senator Francis Faduanshi, from Osun State said this will come with serious consequences. Also speaking, Deputy Minority Leader, Emmanuel Bwacha called for greater reduction of the budget. Senator Opeyemi Bamidele (APC, Ekiti South), however asked that the budget of the Nigerian judiciary be left intact; following plans by executive to cut down the budget of the judiciary by N11 billion.
After an elaborate debate, the budget bill was eventually referred to the Committee on Appropriation to report back on Tuesday.
(Editor: Terverr Tyav)
