The Nigerian Senate has approved a foreign borrowing plan by the country’s President Muhammadu Buhari of 2.343 trillion Naira, some 6.183 billion U.S. dollars to enable the federal government fund the deficit component of the 2021 national budget.
Chairman of the Senate Committee on Foreign and Local Debts, Clifford Ordia while presenting the report of his committee said all the requirements were made for the borrowing while asking the Senate to approve the amount.
According to Senator Ordia, “it is not a new borrowing” as the deficit is captured in the 2021 Appropriations Act. He also said the loan will be obtained from three sources: multilateral, bilateral and international capital markets, noting that the foreign loan will part-finance the budget deficit in the 2021 national budget.
Several stakeholders have expressed deep concerns over the federal government’s rising debt profile, which may push the country’s debt in excess of N36 trillion, with as much as over N25 trillion of the sum contracted in the last six years of the current administration.
In April, the Senate had approved a plan by President Buhari to borrow $2.7 billion from external sources to fund critical projects across Africa’s largest economy.
The upper legislative chamber ratified the combination of $1.5 billion and 995 million euros in loans after considering the report of its committee on local and foreign debts at the time.
The loans were sourced from the World Bank, Export-Import Bank of Brazil and Deutsche Bank of Germany, according to the lawmakers.
In 2020, President Buhari asked lawmakers for permission to obtain $5.5 billion in external funding to help finance budget deficits. Africa’s biggest crude producer is struggling to meet spending commitments after oil prices slumped last year as a result of the coronavirus pandemic.
President of the Senate Ahmad Lawan in his remarks reiterated that the approved loan is part of the borrowing plan of the 2021 Appropriations Act to tackle the deficit component of the budget, while urging public officials handling the borrowing and implementation of the funds to be transparent.
By Abel Ejikeme