October 13, 2021

National Assembly approves Buhari’s $28.2bn loan request •Revised 2020 budget: Senate jerks up oil benchmark to $28

National Assembly approves Buhari’s $28.2bn loan request

Fred Itua and Ndubuisi Orji, Abuja

Nigeria’s upper chamber of parliament on Tuesday approved President Muhammadu Buhari’s request for $5.51 billion in external borrowing from multilateral lenders. 

The borrowing is part of a revised budget for 2020. The revisions were done to enable the government accommodate the effects of the coronavirus pandemic and a sharp drop in oil prices, which have dented Nigeria’s spending plans since oil sales still account for about 90 per cent of its foreign exchange earnings. While the senate granted the president’s request to borrow $5.5 billion for COVID-19 and “priority projects”, the House of Representatives also approved a $22.7 billion earlier rejected last year.

The green chamber approved the request at Tuesday’s plenary session after it considered the report of its Committee on Aids, Loans and Debt Management.

When he sent the request in 2019, Buhari said the loan will be used to finance key infrastructures in the country. But some lawmakers particularly those in the South-East kicked against it alleging the region was excluded in the loan’s implementation plan. The criticisms had led to suspension of its approval which has now been debated and passed after much plea from House Speaker, Femi Gbajabiamila.

According to the speaker every step to address the issues raised against the loan request was met by legal road blocks “in the sense that agreements have already been made that it cannot be approved”.

“So, it is either we approve wholesale or not approve,” he said. The speaker, however, added that the house was able to get the Executive to agree to insert projects from the South-East and North-East into the next borrowing plan.

“For the first time, we added a clause specifying certain projects. We met and demanded for the commitment of the Executive that these projects must be considered in the next borrowing plan and we got their words,” he said.

“I am only seeking for the understanding of our colleagues from the North-East and South-East. All of us will agree that there is a massive wide infrastructural deficit in this country and we need to bridge that gap.

Buhari first sent the loan request to the previous national assembly under Bukola Saraki which thjrew it out.

But at yesteday’s plenary the Senate approved the $5.5 billion loan request after Clifford Ordia, Chairman Committee on Local and Foreign Debts, presented a report on the floor of the upper legislative chamber.

Meanwhile, the Senate, yesterday, raised the proposed $25 per barrel oil price benchmark by the Executive in the revised Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) to $28.

It also reduced from 1.9 million barrel per day to 1.8 million oil production proposed by the Executive in the MTEF/FSP documents.

Senate’s decisions followed the consideration and adoption of a report of its Committee on Finance, asked to work on the revised MTEF/FSP documents.

However, other critical parameters like exchange rate of N360 to $1, 14 .43 inflation growth rate, 4.42 GDP growth rate remained unchanged.

Other assumptions, cum proposals retained are N5.09 trillion revenue , N10 .51 trillion proposed expenditure, N4.95 trillion fiscal deficit, N4.17 trillion new borrowings ( comprising foreign and domestic borrowings). Also retained are N398.5 billion as statutory transfers, N2.68 trillion for debt serving, N272.9 billion as sinking fund, N536.7 billion for pension and gratuities. The Red Chamber also retained the critical components of the proposal as presented by the Executive with adoption of N10.51 trillion as total expenditure, N4.93 trillion as total recurrent, N2.83 trillion for personnel cost and N2.23 trillion for capital expenditure.

Cheers as June 12 gets legal backing

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