Senate Okays FG’s $5.8bn External Loan Request, $10m Grant

Deji Elumoye and Juliet Akoje in Abuja

The Senate has approved the sum of $5,803,364,553.50 and a grant component of N10 million under the 2018-2020 External Borrowing (Rolling) plan of the federal government.

The approval was sequel to the consideration at yesterday’s plenary of a report by the Senate Committee on Local and Foreign Debts.

Presenting the report, the Committee Chairman, Senator Clifford Ordia, said $2,300,000,000 would be sourced from the World Bank; $2,300,000,000 would come from the German Consortium; $90,000,000 from the Islamic Development; 786,382,967 from the China Exim Bank; $276,981,586.50 from the Bank of China, and $50,000,000 from the International Fund for Agricultural Development.

He recalled that President Muhammadu Buhari in a communication dated May 6, 2021, had requested the Senate to consider and approve the federal government’s 2018-2020 External Borrowing (Rolling) plan.

According to him, the 2018-2020 External Borrowing (Rolling) Plan contained a request for approval in the sum of $36,837,281,256 plus €910,000,000 and Grant Component of $10,000,000.

The ranking Senator noted that a report was laid by his Committee before the Senate in July 2021, recommending approval of the sum of $8,575,526,537 and €490,000,000.

He further recalled that the Senate at Plenary in July 2021 approved financing for projects as recommended by the Committee above whilst the Committee continued further legislative action and consideration of the outstanding request.

The Senator added that on September 15, 2021, the President of the Senate had read another communication from the President containing an addendum to the 2018-2020 External Borrowing (Rolling) Plan in the sum of $4,054,476,863, €710,000,000 and Grant Component of $125,000, 000 for various projects and same was also referred to the Committee for further legislative action.

Consequently, Ordia stated that a second report was laid by the Local and Foreign Debts Committee before the Senate in November 2021 recommending approval of the sum of $16,229,577,718, €1,020,000,000 and a Grant component of $125,000,000.

In accordance with the recommendation of the Committee, the Senate at Plenary in November 2021, had approved the sum as financing for projects as recommended by the panel.

He explained that the request for the approval of $5.8 billion was part of the mandate of the Committee in respect of the 2018-2020 External Borrowing (Rolling) plan.

The Committee on Local and Foreign Debts in its observations noted the genuine concerns of Nigerians about the level of sustainability and serviceability of Nigeria’s borrowing within the last decade.

It nevertheless reiterated its stance on the need for a more proactive and broad based approach to revenue enhancement related issues, adding that, “there are noticeable improvements in the country’s revenues.”

The Committee underscored the need for rapid infrastructural and human capital development while noting that the projects to be financed with the loan would have great multiplier effect on stimulating economic growth through infrastructure development, job creation, poverty alleviation, health care and improvement of the nation’s security architecture.