The Nigerian Senate has approved a substantial portion of President Bola Tinubu’s external borrowing plan covering 2022-2024. The approved request entails borrowing $7.8 billion and €100 million.
In November 2023, Tinubu sought the approval of the Senate to borrow a total of $8.7 and €100 million loan. However, the amount approved is 89.7% of the initially proposed dollar loan.
The Senate’s decision came after a thorough consideration of the report presented by its committee on Local and Foreign Debt during the plenary session held on Saturday.
Reason for not approving entire dollar loan
While the Senate approved most of the loan request, it withheld full approval pending the submission of necessary information by the concerned agencies.
The committee stressed the importance of obtaining outstanding details before considering the remaining loan request.
The Senate committee’s report further underscored the necessity of the loans, citing a shortfall in the country’s annual revenue in meeting the demands for rapid infrastructure and human capital development.
It assured that the loan’s terms and conditions would not compromise Nigeria’s economic sustainability or sovereignty.
The report highlighted favourable aspects such as low-interest rates and extended moratorium and repayment periods.
More Insight
- President Tinubu sought Senate approval in November 2023 for the external borrowing plan, emphasizing the need for financing across various sectors, including health, education, infrastructure, agriculture, security, and more.
- The Federal Executive Council, under former President Muhammadu Buhari, endorsed the loan facility on May 15, 2023, to address financial gaps and restore economic activities to normalcy. The funds are earmarked for the development of critical areas such as infrastructure, agriculture, health, education, water supply, security, and employment, as well as financial management reforms.
- Senate President Godswill Akpabio conducted a voice vote, and the lawmakers voted in favour of approving the endorsed portion of the loan.
- It is expected that the country’s external debt, which experienced a decrease in the third quarter of 2023, will witness an upward trajectory in subsequent quarters.
