Barely 72 hours after President Bola Tinubu forwarded a formal request to the Senate to approve a $2.2 billion foreign loan to enable the Executive to reduce the N9.7 trillion budget deficit for the 2024 fiscal year, the Red Chamber of the National Assembly on Thursday approved the request.
The approval by the Senate of the request was sequel the presentation of a report by the Chairman, Senate Committee on Local and Foreign Debts, Sen. Aliyu Wamakko, during plenary to the lawmakers
The Deputy Senate President, Sen. Jibrin Barau, who presided over the plenary, commended the committee for its timely and thorough examination given to the President’s loan request.
The President had in his Letter of Request on the loan on Tuesday, which was read by the Senate President, Sen. Godswill Akpabio, during the Senate and House of Representatives plenaries, explained that the loan was integral to his administration’s fiscal strategy for the coming year.
The lawmaker said: “The presidential request for $2.2 billion, equivalent to N1.77 trillion, is already enshrined in the external borrowing plan for the 2024 fiscal year.”
Akpabio directed the Senate Committee on Local and Foreign Debts to expedite its review of the request and present a report within 24 hours.
Wammako submitted the committee’s findings during Thursday’s plenary, in a report titled “Implementation of New External Borrowing of N1,767,610,321,779.00 equivalent to $2.209bn in the 2024 Appropriation Act through the issuance of Eurobonds and other sources”, and advocated for the approval of the president’s request.
According to him, the approval “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.”
The lawmaker said that the Federal Government could raise all or part of the new external borrowing of $2.21 billion through the issuance of Eurobonds in the international capital market.
Specifically, the committee’s recommendations as read by Wammako stated: “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 and twenty-one thousand, seven hundred and seventy-nine naira (1,767, 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 debt sovereign Sukuk in the ICM and 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,.22bn, 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 utilised for the implementation of capital projects in 2024.
“This will ensure that additional funds are directed to infrastructure and developmental projects that will contribute to the nation’s long-term growth and stability”, the committee chairman added.
Following the committee’s presentation of its report, the lawmakers at the Red Chamber unanimously approved the recommendations.
