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Senate approves Buhari’s $5.8bn borrowing request

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President Muhammadu Buhari presenting the 2022 budget to the National Assembly Borrowing
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…gives nod to $10m grant component

The Senate on Wednesday approved the sum of $5,803,364,553.50 USD and a grant component of N10 million USD under the 2018-2020 External Borrowing (Rolling) plan.

The approval followed the consideration of a report by the 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 Bank, 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.

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He recalled that President Buhari in a communication dated May 6, 2021, had requested the Senate to consider and approve the Federal Government 2018-2020 External Borrowing (Rolling) plan.

According to him, the 2018-2020 External Borrowing (Rolling) Plan contained a request for approval in the sum of $36,837,281,256 (Thirty Six Billion, Eight Hundred and Thirty Seven Million, Two Hundred and Eighty One Thousand Two Hundred and Fifty Six United States Dollars) plus €910,000,000 (Nine Hundred and Ten Euros) and Grant Component of $10,000,000 (Ten Million United State Dollars).

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 (Eight Billion, Five Hundred and Seventy Five Million, Five Hundred and Twenty Six Thousand, Five Hundred and Thirty Seven United States Dollars) and €490,000,000 (Four Hundred and Ninety Million Euro).

He further recalled that the Senate at Plenary in July 2021 approved financing for projects as recommended by the Committee above whilst the Committee continued further legislative action and consideration of the outstanding request.

He added that on September 15, 2021, the President of the Senate 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 Grant Component of $125,000, 000 for various projects and same was also referred to the Committee for further legislative action.

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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 sum of $16,229,577,718 (Sixteen Billion, Two Hundred and Twenty Nine Million, Five Hundred and Seventy Seven Thousand, Seven Hundred and Eighteen usd), €1,020,000,000 (One Billion and Twenty Million euros) and a Grant component of $125,000,000 (One Hundred and Twenty Five Million usd).

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

He explained that the request for the approval of $5.8 billion 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.

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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.

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

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