Senate approves Buhari’s 850 billion naira loan request

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The Nigerian Senate

Senate approves Buhari’s 850 billion naira loan request

Without a dissenting voice, the Senate on Tuesday gave its fast-track approval to President Muhammadu Buhari’s request to take out a new 850 billion naira loan on the domestic capital market.

The approval came less than five minutes after the request was read to senators by Senate Speaker Ahmad Lawan during the plenary session.

To obtain immediate approval of the President’s request, the Senate suspended Ordinance 1 of its permanent article which stipulates that this request must be referred to the relevant committee for further parliamentary deliberation.

President Buhari had stated in a letter to the President of the Senate that “to ensure that there are sufficient funds to finance essential projects and programs in the 2020 budget, I hereby request the approval of the Senate by resolution to lift the 850 billion naira of new external borrowing in naira from the domestic capital market instead of the international capital market ”

Buhari lamented the federal government’s inability to seek the loan from the international capital market which he said would have been more beneficial.

He drew the attention of the Senate to the provisions of the 2020 national budget which allowed the government to raise the loan to finance the investment budget.

“The Senate may wish to recall that the 2020 finance law provided for 1,594,986,700.544 naira in new domestic borrowing and 850 billion naira in new external borrowing. These loans were to partially finance the 2020 budget deficit of only 2,175,197,885,232. Said Buhari.

He said that although “external borrowing in the international capital market increases Nigeria’s external reserves, provides access at lower costs and avoids crowding out private sector borrowers who also wish to access the domestic capital market”. , recent developments in the global economic environment as the result of the coronavirus pandemic and falling international oil prices have made borrowing in international capital markets less attractive at this time ”

“However, our intention remains to access the international capital market when conditions improve to refinance these N850 billion in new borrowing and embody the benefits inherent in external borrowing,” added BuhRI.

According to him, “domestic capital market conditions are favorable in terms of availability of funds and relatively low interest rates. This cause of action is considered prudent given our current realities.

Buhari informed the Senate that he had “instructed the Minister of Finance, Budget and National Planning to make himself available to provide any additional information or clarification you may require.”

After Senate approval, Lawan asked the Senate Finance Committee to get in touch with the Minister of Budget and National Planning to get more details about the loan.


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