Nigeria’s senators approve President Buhari’s $8.325m, €490m external loan requests

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Photo: The Nigerian Senate

Nigerian senators have approved President Muhammadu Buhari’s request for ongoing external loans to the tune of $8,325,526,537 and €490,000,000 (Euros) under the 2018-2020 External Borrowing (Rolling) Plan.

The approval on Thursday followed the consideration of a report on the 2018-2020 External Borrowing (Rolling) Plan by the Committee on Local and Foreign Debt.

Sen. Clifford Ordia, Chairman of the Committee, in his presentation, said the committee noted with utmost importance, the genuine and very serious concerns of Nigerians about the level and sustainability/serviceability of the country’s borrowings in the last decade.

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He said, “Our (Nigeria’s) debt service figures constitute a huge drain on our revenue to the extent that it accounts for over 30 per cent of our expenditure in the annual budget.”

The Committee Chairman explained that due to the shortfall in the country’s annual revenues in relation to the need for rapid infrastructural and human capital development the senate has been passing deficit budget every year, which necessitated borrowing in order to finance the deficit in the national budget”.

Ordia noted that out of the total borrowing request of $36,837,281,256 contained in the re-forwarded request of Mr President, $26,154,536,533 is for funds proposed to be borrowed from various financial institutions from the Peoples Republic of China.

He stressed that the proposed projects in the Ministries of Transportation, FCT, Aviation, Works and Housing, Agriculture, Water Resources and some commissions were mostly ongoing projects and programmes in respect of which External Borrowed funds had been spent in the past, including loans.

“These projects have a great multiplier effect on stimulating economic growth through infrastructure development, job creation and poverty alleviation, stimulation of commercial and engineering activities, and the consequent tax revenues payable to government as a result of these productive activities,” he explained.

He disclosed that the funding agencies are: World Bank – $796,000,000; China Exim Bank – $2,901,026,509; Industrial Commercial Bank of China – $2,484,555,304; African Development Bank – $104,200,000; Africa Growing Together Fund – $20,000,000.

According to him, others include: “French Development Agency -€240,000,000; European Investment Bank – €250,000,000; European ECA/KfW/IPEX/AFC – $1,959,744,724; and International Fund For Agricultural Development (IFAD) – $60,000,000.”

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