The Senate and House of Representatives had, in their respective plenaries on Tuesday, read President Tinubu’s request for the loan.
By Deborah Hassan
365Daily – The Senate has approved President Bola Tinubu’s request to take another $2.2 billion (N1.767trn) loan to finance the 2024 ₦9.7 trillion budget deficit.
The approval which was granted during plenary on Thursday, November, 20204, followed the presentation of a report by the Chairman, Senate Committee on Local and Foreign Debts, Sen. Aliyu Wamakko.
The Senate and House of Representatives had, in their respective plenaries on Tuesday, read President Tinubu’s request for the loan. He had explained that the loan was integral to his administration’s fiscal strategy for the coming year.
The Senate President, Godswill Akpabio thereafter directed the Senate Committee on Local and Foreign Debts to review the request and present a report within 24 hours.
Wammako, in the report titled, “Implementation of New External Borrowing of N1,767,610,321,779.00 equivalent to $2.209bn in the 2024 Appropriation Act through the issuance of Eurobonds and other sources,” urged his colleagues to approve the loan request in order to enable the federal government continue the execution of ongoing projects and programmed in the 2024 Appropriation Act which are critical for growth and development.
“It will contribute to the implementation of the Debt Management Strategy which seeks to reduce the cost of borrowing, lengthen the maturity of the public debt stock, free up space in the domestic market for other borrowers and help increase Nigeria’s external reserves.”
He added, “That the Senate do approve the implementation of the new external borrowing of one trillion, seven hundred and sixty-seven billion, six hundred and ten million, three hundred and twenty-one thousand, seven hundred and seventy-nine naira (1,767, 610,321,779.00) — (the equivalent of USD2,209,512,902.22b) at the budget exchange rate of USD1.00/800 in the 2024 Appropriation Act and that the amount should be raised from one or more sources.
“Namely; Issuance of Eurobonds in the ICM, Issuance of debt sovereign Sukuk in the ICM and Bridge/syndicated loans, subject to market conditions.”
“Based on availability and cost, to issue Eurobonds in the sum of USD1.70 billion or more, but not more than USD2,209,512,902,.22bn, approved as new external borrowing in the 2024 Act.
“Given the significant increase in the official exchange rate from USD1.00/800 to approximately 41,640, it is recommended that the exchange rate excess resulting from this adjustment be exclusively utilised for the implementation of capital projects in 2024.
“This will ensure that additional funds are directed to infrastructure and developmental projects that will contribute to the nation’s long-term growth and stability.”
After the report’s presentation, the Senate approved it at the Committee of Supply unanimously.