The National Assembly accepted a $1.5 billion and €995 million loan request for the Buhari government in April.
President Muhammadu Buhari’s proposal for a $6.1 billion loan was accepted by the Senate.
The $6.1 billion loan request, which is around N2.343 trillion, was accepted by the Senate on Wednesday after the Senate Committee on Local and Foreign Debts examined its report.
Clifford Ordia, the committee’s chairman, presented the findings. Mr Buhari had requested that the loan be approved by the National Assembly in May.
The loan would be funded through multilateral and bilateral auctions, as well as the international capital market, he added.
He also said that the National Assembly had already authorized an N4.6 trillion borrowing bill in the Appropriation Act for 2021. And that the N2.3 trillion in fresh borrowing will help to cover the deficit in the 2021 budget.
Mr Ordia stated in his presentation that the proposal is not new because it was included in the borrowing plan when the national parliament authorized the budget for 2021.
“What we’re going to pass isn’t a fresh loan; it was approved in the budget for 2021,” he explained.
Following the ratification, Senate President Ahmad Lawan stated that the National Assembly must ensure that the government does not engage in wasteful spending.
“I’d want to express my gratitude to the committee; this is not a new loan.” We have authorized this financing strategy. “All we’ve done is provided the required resolutions for it to be implemented.” Every penny matters. To supervise it, our committees must be awake. “Frivolous expenditures should be avoided at all costs.”
Nigeria’s budget for 2021 already has a N5.6 trillion deficit.
The loan will be used to support “projects from important areas of the economy, namely: Power, Transportation, Agriculture, and Rural Development, Education, Health, Counterpart Funding for Multilateral and Bilateral Projects, Defense, and Water Resources,” according to the president.
The president’s loan request was approved despite Nigeria’s rising deficit and debt crises.
Mr Buhari had admitted in October that the projected budget deficit was higher than the 3% level imposed by the Fiscal Responsibility Act of 2007.
He said the action was required because of the “existential challenge of the Coronavirus epidemic and its aftermath; I feel this justifies exceeding the threshold as set for by this statute.”
The National Assembly accepted loan requests for the Buhari government totaling $1.5 billion and €995 million in April.
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