Senate approves Buhari’s $5.513bn external loan request

Nigeria Senate has approves President Buhari’s $5.513bn external loan request to finance the revised 2020 budget.

The approval followed the presentation and consideration of the report of the Senate Committee on Local and Foreign Debts, Senator Clifford Odia (Edo Central)

Federal Government would source $3,400,000,000 at one percent interest rate from the International Monetary Fund (IMF) for Rapid Financing Instrument to part-finance 2020 proposed revised budget

According to Senator Clifford Odia, the Federal Government would also source the sum of $1,500,000,000 from the World Bank for Development Policy Financing of the revised 2020 budget at 2.38 percent interest rate; and another $500,000,000 from the African Development Bank (AfDB) for COVID-19 crises response budget support operation to finance revised budget deficit at 1.315 percent interest rate.

The Islamic Development Bank (IsDB) is also expected to give a loan of $113,000,000 to the Federal Government of Nigeria to part finance the 2020 revised budget deficit at 0.4 precent interest rate. The Committee in its report noted that revenue projections contained in the Appropriation Act of 2020 was adversely impacted by revenue shortfalls due to the COVID-19 pandemic.

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It further observed that same led to dwindling Government revenue from oil sales as well as sharp drop in global oil prices below $20 (USD). The Committee noted that as a consequence, the Federal Government found it expedient to seek amendment to the Appropriation Act of 2020 as well as review the 2020-2022 Medium Term Expenditure Framework (MTEF).

The President, however, explained that the external borrowing plan target-projects cut across all sectors. The loan if approved, he said, would be used to execute key infrastructure projects across the country.

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