Legislature

Buhari Seeks N850bn Loan Approval From Reps

Published

4 years ago

2020/05/05

President Muhammadu Buhari has written a letter to the House of Representatives, seeking their approval for a N850 billion loan. The letter was read on the floor of the House at its resumed plenary on Tuesday.

According to the letter, the N850 billion loan is to be sourced from domestic capital market to finance critical projects in the 2020 budget. The president had sought the Senate’s approval for the loan to fund some projects in the 2020 budget.

He made the request in a letter read last Tuesday by Senate President Ahmad Lawan, during plenary.

Buhari sought to raise the loan from the Domestic Capital Market to finance critical projects and programmes in the 2020 budget

He said the recent developments in the global economic environment occasioned by coronavirus and decline in international oil prices had made it less attractive to borrow from the International Capital Markets. Buhari said the conditions in the Domestic Capital Market were favourable in terms of availability of funds and relatively low-interest rates. The letter read in part: “To ensure that there are adequate funds to finance critical projects and programmes in the 2020 Budget, I hereby seek the Senate’s approval, by Resolution, to raise the N850bn of New External Borrowing, in Naira, from the Domestic Capital Market, instead of from the Internattonal Capital Markets. Buhari’s letter, however, provided no details of the “critical projects and programmes” to be financed with the loan. However, the Debt Management Office (DMO) had said that the N850 billion loan is not a new borrowing but a mere fiscal step of converting external borrowing to domestic alternative for the purposes of achieving fiscal efficiency of the 2020 budget. The Senate, at its first plenary session on Tuesday after an indefinite adjournment in the wake of the coronavirus pandemic in March, deliberated on the loan request by the Executive.