Nigeria’s Senate has approved the 2025-2026 external borrowing plan of $21.5 billion for the Federal Government and a loan request of 15 billion Japanese Yen and 65 million Euros grant in furtherance of the current drive to bridge the budget deficit through local and foreign debt instruments for critical infrastructure projects in the country.
President Bola Tinubu had recently presented the borrowing plan designed to fund various critical national development projects across key sectors to the upper legislative chamber for consideration.
Also, the Red Chamber approved the issuance of Federal Government Bond of N757 billion for payment of accrued rights pension arrears as at December 2023 for the Contributory Pension Scheme (CPS) and President Tinubu’s request of capital raising of up to $2 billion through a foreign-currency denominated instrument in the domestic market.
The Legislature’s approval of the borrowing plan loans was sequel to the presentation and consideration of the report of Committee on Local and Foreign Debt by its Chairman, Sen. Aliyu Wamakko during the plenary session.
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In his presentation of the committee’s report, Wamakko explained that the loan request was part of the already approved Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) for the 2025 budget.
He said the MTEF and FSP contained most of the items in the borrowing plan, adding that the presentation of the committee’s report for approval was based on the findings, which justified the borrowings by the Federal Government.
In his contribution to the debate on the report, Chairman of Senate Committee on Appropriations, Sen.r Solomon Adeola, who seconded the motion, said the approval was a formality, as most of the items had been outlined in the MTEF and 2025 budget previously passed by National Assembly.
The lawmaker said:“The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget.”
Similarly, Chairman of Senate Committee on Finance, Senator Sani Musa, who clarified that the borrowing plan covered a six-year disbursement period and not just the 2025 fiscal year, said Nigeria had not defaulted on any of its existing loan repayments.
He said: “There’s no economy that grows without borrowing. What we are doing is in line with global best practices.”
Contributing to the deliberation, Sen. Adetokunbo Abiru, confirmed that the loan request complied with the Fiscal Responsibility Act (FRA), and the Debt Management Act (DMA), and that the Federal Government required the loans for capital projects and human development.
The lawmaker expatiated: “These loans are long-term, concessional and come with favorable repayment terms. Some stretch between 20 and 35 years.”
