Senate okays Buhari’s $5.5bn loan request

The Nigerian Senate on Tuesday approved President Muhammadu Buhari’s $5.513 billion external loan request to finance the revised 2020 budget.

This followed the consideration of the report of the Senate Committee on Local and Foreign Debts, Senator Clifford Odia (Edo Central) by the upper chamber.

Buhari had, in his letter of request, said the $5.513 billion external loan is to enable the Federal Government fund the 2020 revised budget.

However, the components of the external loan, which is to enable the Federal Government execute its priority projects and for projects to support state governments  in stimulating their economy, which has been adversely affected by the COVID-19 pandemic, was stood down by the Senate due to lack of requisite details.

A lender for the Federal Government’s priority projects as approved by the Senate is the African Development Bank (AfDB) – $125million to strengthen healthcare system and improve response to COVID-19 and $23 million for financing smallholder farmers to mitigate food security impact of the COVID-19 pandemic.

Others are $600million from the Islamic Development Bank to support response to challenges posed by COVID-19 and $500 million from the African Export-Import Bank to provide critical medical supplies to combat COVID-19.

Also, the Senate passed the 2020-2022 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) of the Federal Government.

President Muhammadu Buhari had last Thursday, in a letter, urged the upper chamber to consider and approve the 2020-2022 MTEF/FSP.

The Senate also backed the proposed exchange rate, which was moved by the Federal Government from N306 to one dollar to N360 per dollar, though other critical parameters like 14.43% inflation growth rate and 4.42 GDP growth rate were retained.

Some of the assumptions retained are N5.09 trillion Federal Government revenue, N10.51 trillion, N4.95 trillion fiscal deficit and N4.17 trillion new borrowings (including foreign and domestic borrowing).

Others are N398.5 billion as statutory transfers, N2.68 trillion for debt service, N272.9 billion as sinking fund and N536.7 billion for Pension and gratuities.

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