By Olugbenga Salami
The Senate on Thursday approved the loan request of $2.09billion, equivalent to N1.767trillion by President Bola Tinubu.
The approval, which came 48 hours after receiving the request, followed the consideration of the report of the Senate
Committee on Local and Foreign Debts,
Senator Aliyu Wammako (APC Sokoto North) during plenary.
Tinubu had on Tuesday this week in separate letters to both chambers of the National Assembly, requested for approval of N1.767trillion loan for part funding of N9.7trillion deficit in the N28.7trillion 2024 budget .
The Red Chamber had upon receipt of the request, mandated its committee to expeditiously work on it and report back within 24 hours.
Presenting the 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”, said the presidential request was very 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 maintained that Nigeria could raise all or part of the new external borrowing of $2.21billion through the issuance of Eurobonds in the International Capital Market, ICM.
Senator Wammako added that the issuance is for the part – financing of budget deficit.
The committee as presented by the chairman, 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 Twenty-One Thousand, Seven Hundred and Seventy-Nine Naira (41,767, 610,321,779.00) (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 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 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.