By Abdulateeef Bamgbose
Forty-eight hours after the receipt of a request from President Bola Tinubu for $2.209 billion loan (N1.767trillion), the Senate yesterday approved it.
President Tinubu had on Tuesday in separate letters to both chambers of the National Assembly requested for the approval of N1.767trillion loan for part-funding of the N9.7trillion deficit in the N28.7trillion 2024 budget.
It would be recalled that the Senate upon receipt of the request mandated its Committee on Local and Foreign Debts to expeditiously work on it and report back within 24 hours.
Accordingly, Chairman of the committee, Senator Aliyu Wammako, during plenary, presented reports on the presidential request for approval.
Wammako in the report titled ‘Implementation of New External Borrowing of N1, 767, 610, 321, 779, equivalent to $ 2.209billion in the 2024 Appropriation Act through the Issuance of Eurobonds and other Sources,’ said the presidential request was necessary.
According to him, the requested loan is planned for the execution of ongoing projects in the 2024 Appropriation Act that are critical for growth and development.
“It 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,” he explained.
Wammako added that Nigeria could raise all or part of the $2.21billion loan through the issuance of Eurobonds in the International Capital Market, ICM.
The committee as presented by Wammako recommended: “That the Senate do approve the implementation of the new external borrowing of N41,767, 610,321,779 (equivalent of $2,209,512,902.22billion) at the budget exchange rate of $1.00/800 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 debut 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 $1.70 billion or more, but not more than $2,209,512,902,.22, approved as new external borrowing in the 2024 Act.
“Given the significant increase in the official exchange rate from $1.00/N800 to approximately N41,640, it is recommended that the exchange rate excess resulting from this adjustment be exclusively utilised for 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 Senate, after presentation of the report, expeditiously approved it at the Committee of Supply without any dissenting voice.
