The Nigerian Senate has given Expeditious Approval to President Bola Tinubu’s request to borrow N1.767 trillion (approximately $2.2 billion) to fund the N28.7 trillion 2024 Appropriation Act, which is to expire in December.
President Bola Tinubu had sent the request to the Senate on Tuesday
November 19th, 2024 seeking approval of the New borrowing in the 2024-2026 External borrowing plan
The Senate ‘s approval follows the presentation and adoption of the Senate Committee on Local and Foreign Debt’s report, presented by the committee chairman, Senator Wammako Magatarkada.
The Committee recommended using an exchange rate of one USD 1 to N800, as outlined in the 2024 Budget, while advising that the borrowing be raised through Eurobond issuance, debut sovereign Sukuk issuance, and bridge/syndicated loans, subject to market conditions.
The Committee recommended that the excess funds from this exchange rate adjustment be earmarked solely for capital projects in 2024, ensuring that these funds contribute to critical infrastructure and long-term national development.
The Committee also emphasized the need for a Promissory Note Programme and bond issuance to address outstanding debts and liabilities of the federal government.
The Senate prioritized the settlement of reimbursement claims owed to states, high-priority judgment debts, and other liabilities incurred by federal ministries, departments, and agencies.
Senator Magatarkada stated that these measures would prevent additional interest costs, curb the growth of the federal government’s debt profile, and help reduce the debt-to-GDP ratio.
The Senate resolved that the Minister of Finance, in collaboration with the Debt Management Office, is authorized to take all necessary steps to implement this resolution.
President Tinubu had stated that Proceeds from the borrowing will be directed toward key sectors, including power, transport, agriculture, defense, and security.
Following the presentation, the Senate adopted all five recommendations and formally approved the borrowing request.
(Editor : Ena Agbanoma)
