Senate approves Tinubu’s new external borrowing plan of $2.2 billion

Senate on Thursday at plenary approved the new external borrowing plan request of $2.2 billion presented for consideration by President Bola Tinubu.

The approval followed the adoption of the report of the Senate Committee on Local and Foreign Debts.

The report was presented by the Chairman of the Committee Sen. Aliyu Wammako (APC -Sokoto).

Presenting the committee‘s report, Wammako said the presidential request was very necessary for approval.

He said the loan request would be utilised for the execution of ongoing projects and programs in the 2024 appropriation act, saying that the projects were critical for national growth and development.

Other expected benefits of the loan 

Highlighting other areas the loan would help the country, the Senate Committee Chairman said:

“It will contribute to the implementation of the debt management strategy, which seeks to reduce the cost of borrowing. 

“It will 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.” 

Wammako said Nigeria could raise all or part of the 2.2 billion dollars through the issuance of Eurobonds in the International Capital Market ( ICM).

Wammako thereafter recommended the following:

“That the Senate does approve the implementation of the new external borrowing of 2.2 billion dollars at the budget exchange rate of one dollar to N800 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, and bridge, syndicated loans, subject to market conditions.” 

• The report was thereafter unanimously approved via an affirmative voice vote.

• In his remarks after the approval, Deputy President of the Senate, Senator Jibrin Barau (APC-Kano), who presided over plenary commended the Wammako-led committee for a job well done.

Backstory

President  Bola Tinubu had on Tuesday, Nov 19, in separate letters to both chambers of the National Assembly, requested approval of a $2.2 billion dollars external borrowing plan to part fund the N9.7 trillion deficit in the 2024 budget.

• Senate upon receipt of the request, mandated its committee on local and foreign debts to expeditiously ensure further legislative inputs on the request and report back within 24 hours.
• Meanwhile, Nairametrics earlier reported that the Federal Government of Nigeria was negotiating another $500 million loan from the World Bank to boost basic education, focusing on improving learning outcomes and reducing the number of out-of-school children.
• According to the Programme Information Document (PID), the loan is part of the World Bank’s HOPE for Quality Basic Education for All initiative.

The project, which is expected to receive formal approval by March 2025, aims to address Nigeria’s education challenges and enhance access to early childhood, primary, and junior secondary education.