The Senate, on Thursday, approved President Bola Tinubu’s loan request of $2.2 billion to partially finance the ₦9.7 trillion budget deficit for the 2024 fiscal year.
The approval followed the presentation of a report by the Chairman, Senate Committee on Local and Foreign Debts, Aliyu Wamakko, during plenary.
Presiding over the session, Deputy Senate President, Jibrin Barau, commended the committee for its swift action and thorough examination of the loan request.
In a letter read during the Senate and House of Representatives plenaries on Tuesday, Tinubu had explained that the loan was integral to his administration’s fiscal strategy for the coming year.
“The presidential request for $2.2 billion, equivalent to ₦1.77 trillion, is already enshrined in the external borrowing plan for the 2024 fiscal year,” Senate President, Godswill Akpabio, stated while reading the letter.
He further directed the Senate Committee on Local and Foreign Debts to expedite its review of the request and present a report within 24 hours.
“The Senate Committee on Local and Foreign Loans should, therefore, give the request expeditious consideration and report back within 24 hours,” Akpabio emphasised.
Although the deadline elapsed on Wednesday, the committee submitted its findings during Thursday’s plenary, leading to the loan’s approval.
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,” said the presidential request was necessary for approval.
According to him, the requested loan is planned for 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 explained.
He added that Nigeria could raise all or part of the new external borrowing of $2.21bn through the issuance of Eurobonds in the International Capital Market.
The committee, as presented by Wammako, recommended thus, “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.”
Wammako added, “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 without any dissenting voice.
In his remarks after the approval, the Senate Deputy President commended the Wammako-led committee for a job well done.
Meanwhile, in a reaction, former Vice President and 2023 presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar has characterised the loans taken by President Bola Tinubu as burdensome for Nigerians, warning that they will place unbearable strain on the economy.
The former Vice President, in a statement on Thursday, said, “These Tinubu’s loans are bone-crushing to Nigerians and bringing insufferable pressure on the economy, especially when they are not properly negotiated and utilised.”
The Senate, on Thursday, approved President Tinubu’s request to secure a $2.2bn external loan.
The approval came 48 hours after the Senate received the President’s request for the $2.2bn loan, equivalent to N1.767tn.
The approval followed the presentation of a report by the Chairman of the Senate Committee on Local and Foreign Debts, Aliyu Wamakko (APC, Sokoto North), during Thursday’s plenary.
Tinubu had explained that the loan was integral to his administration’s fiscal strategy for the coming year in a letter read during Tuesday’s Senate and House of Representatives plenaries.“The Presidential request for $2.2bn, equivalent to N1.77tn, is already enshrined in the external borrowing plan for the 2024 fiscal year,” the Senate President, Godswill Akpabio, had stated while reading the letter.
He directed the Senate Committee on Local and Foreign Debts to expedite its review of the request and present a report within 24 hours.
Although the deadline elapsed on Wednesday, the committee submitted its findings during Thursday’s plenary, leading to the loan’s approval.
Senator Wammako said the presidential request was necessary for approval while presenting the committee’s 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.”
He said, “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 Nigeria could raise all or part of the New External Borrowing of $2.21bn through the issuance of Eurobonds in the International Capital Market.
The Senate, after the presentation of the report, expeditiously approved it at the Committee of Supply without any dissenting voice.
In his remarks after the approval, the Deputy President of the Senate, Senator Jibrin Barau, who presided over the session, commended the Wammako-led committee for a job well done.
But Atiku, reacting in a statement, expressed concern that Nigeria was sinking deeper into debt, with the National Assembly once again acting as an accomplice.
The ex-VP stated, “The recent report released by the World Bank, showing Nigeria as the third most indebted country to the International Development Association, is very concerning.
“This report is coming just when the government has already sent a proposal to the National Assembly signalling an intention to borrow an additional N1.7tn being a shortfall in the 2024 budget through Euro Bonds.
“What makes this particular loan proposal even more concerning is that it is benchmarked at the exchange rate of 1 USD to N800, whereas the current exchange rate from the Central Bank of Nigeria stands at over N1,600 to 1 USD.
“Nigeria is sinking further in debt, and the National Assembly has become an accomplice once more. Tinubu had, in July this year, boasted that the FIRS and Customs under his watch have collected all-time high revenues to finance the Budget. Why then are they still borrowing? There is something that they are not telling Nigerians, even as they are being crushed by a combination of their failed trial-and-error policies and loan rackets.”
Waziri Adamawa emphasised that it was time for Nigeria to exercise more caution and apply careful calculations to the ongoing loan spree.
He said, “It is concerning that the voracious appetite for these humongous loans is powered by corruption and not for infrastructure and development needs. A report by Budgit, a budget watchdog, has disclosed that the 2024 Budget is a mess because of the level of pork associated with it.
“I feel a sense of personal agony seeing that just a few years after the administration of President Obasanjo took our country out of foreign indebtedness, we are today back at the top spot in the same conundrum.”