The Senate has given a speedy approval for President Muhammadu Buhari to borrow N850 billion for the government.
Buhari’s letter seeking the loan was read Tuesday at a Senate plenary. The lawmakers met physically at the National Assembly despite the coronavirus lockdown in Abuja.
The loan, which will be sourced from domestic capital market, is needed to finance projects and programmes in the 2020 budget, he said.
The lawmakers suspended relevant rules to give speedy consideration and passage to the request.
The president’s message was conveyed in a letter which was read out by the Senate President, AhmadLawan, at the start of plenary on Tuesday.
Part of the letter reads, “Request for the National Assembly to raise N850 billion in new external borrowing in the 2020 Appropriation Act in naira from the domestic capital market.
“The Senate may wish to recall that the 2020 Appropriation Act provided for 1,594,986,700,544 of new domestic borrowing and N850 billion of new external borrowing. These borrowings were to part finance the 2020 budget deficit of N2,175,197,885,232 only.
“Furthermore, the Senate may wish to note that external borrowing from the international capital market increases Nigeria’s external reserves, provides access to lower costs as well as avoids crowding out private sector borrowers who also wish to access the domestic capital market.
“However, recent developments in the global economic environment as a result of the Coronavirus pandemic and the decline in international oil prices have made it less attractive to borrow from the international capital markets at this time.
“To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget I hereby seek the Senate’s approval that resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of from the international capital market
“However, it remains our intention to access the international capital market when conditions improve to refinance this N850 billion of new borrowing and epitomise the benefits inherent in external borrowing.
“Presently, the conditions in the domestic capital market are favourable in terms of availability of funds and relatively low interest rates. This cause of action is deemed prudent given our current realities.”
The president also noted that he has directed the Minister of Finance, Budget and National Planning to make herself available to provide any additional information or clarification which the lawmakers may require.
The Senate Leader, Abdullahi Yahaya, thereafter, moved that the Senate suspends Rule One of the Senate Standing Order to enable the lawmakers regulate the normal procedure of the consideration and passage of the loan request.
This was unanimously adopted in a voice vote