Nigerian Senate okays Tinubu’s $2.2bn loan request

News Update

THE Senate on Thursday approved President Bola Tinubu’s request for $ 2.209 billion, equivalent to N1.767 trillion loan.

The Senate approval was a sequel to deliberations on the report of its Committee on Committee on local and foreign debts presented by its chairman, Senator Aliyu Wammako.

President Bola Tinubu had in a letter read on the floor of both Chambers of Parliament on Tuesday sought approval of a new external borrowing of $2.209 billion (N1.767 trillion), as provided for in the 2024 Appropriation Act.

According to the President, the request was part of Nigeria’s budgetary financing plan that is aimed at addressing a portion of the N9.17 trillion fiscal deficit in the 2024 budget.

President of the Senate, Godswill Akpabio, had subsequently mandated the committee on Local and foreign debts to work on it within a timeline of 24 hours.

Presenting his Committee report titled, “Implementation of New External Borrowing of N1, 767, 610, 321, 779.00 equivalent to $ 2.209billion in the 2024 Appropriation Act through the issuance of Eurobonds and other sources,” the Senator representing Sokoto North restated the motive of the loan as he declared that it was meant 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 further noted that Nigeria could raise all or part of the New External Borrowing of $ 2.21 billion through the issuance of Eurobonds in the International Capital Market (ICM).

The Committee in its report recommended, “That the Senate do approve the implementation of the new external borrowing of 41,767, 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 debut sovereign Sukuk in the ICM, & 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,.22b, 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 utilized for the implementation of capital projects in 2024.

“This will ensure that additional funds are directed to infrastructure & developmental projects that will contribute to the Nation’s long-term growth and stability.”

The Senate after the presentation of the report, expeditiously approved it at the committee of supply without any dissenting voice.

In his concluding remarks, Deputy Senate President, Senator Jibrin Barau who presided over the plenary commended Senator Wammako for what he called a thorough job.