Senate, House Of Reps Approve President Buhari’s Loan Packages

Femi Gbajabiamila, Ahmad Lawan
Femi Gbajabiamila, Ahmad Lawan

The Senate, Tuesday, approved President Muhammadu Buhari’s $5.513 billion external loan request to finance the revised 2020 budget.

Though the Senate stood down a component of loan which the federal government said will help in the execution of its priority projects and for projects to support State Governments in stimulating their economy which has been adversely affected by the COVID-19 pandemic on grounds of lacking requisite details, the loan request was however approved after presentation and consideration of the report of the Senate Committee on Local and Foreign Debts.

Lenders for the federal government’s priority projects as approved by the Senate are the AfDB – $125 million to strengthen the healthcare system and improve response to COVID-19 and $23 million for financing small-holder farmers to mitigate food security impact of the COVID-19 pandemic, $600 million from the Islamic Development Bank to support Nigeria’s response to challenges posed by COVID-19 and $500 million from the African Export-Import Bank to provide critical medical supplies to combat COVID-19.

The Federal Government’s intention of borrowing €995 million from the Export-Import Bank of Brazil to support Green imperative and enhance the mechanisation of agriculture and agro-processing in Nigeria, was put in abeyance by the upper chamber.

The $500 – $750 million also being negotiated with the World Bank for State Fiscal Transparency and Sustainability Program to provide fiscal support to the States was not approved.

The on-going negotiation by the Federal Government with the World Bank for between $500 million – $750 million for COVID-19 Action Recovery and Economic Stimulus Programme to support state-level efforts to protect livelihoods, ensure food security and stimulate economic activities, is also yet to be approved.

Meanwhile, the House of Representatives, Tuesday, approved President Muhammadu Buhari’s request of $22.7 billion foreign loans.

The request was approved by the lawmakers after consideration of a report by the house committee on aids, loans and debt management on Tuesday, June 2.

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Recall that some lawmakers especially those of the South-East caucus had kicked against the loan request following the federal government’s failure to include projects in the region among those to be financed from the loan.

Buhari had said that the loan which some lawmakers previously kicked against would be used to fund infrastructural development across the country. The Senate approved the loan request in March 2020.

As at September 30, 2019, Nigeria had a debt profile of ?26.2 trillion. While the total domestic debts is about ?18 trillion or 68.45 per cent, the West African country owes foreign lenders ?8 trillion.