Senate approves $1bn external loan for FG

Senate has given approval to the federal government for external borrowing to finance its priority projects and those to support the state governments in the revised 2020 budgets.

The approval contained in the report of the Committee on Local and Foreign Debts is part of measures aimed at addressing the impact of the Covid-19 pandemic and to improve on the country’s food security.

President Muhammadu Buhari, in a letter dated May 19, 2020, asked the Senate to approve for borrowing, the sum of Five Billion, Five Hundred and Thirteen Million Dollars ($5, 513, 000, 000).

The funds according to the letter read by the Senate President, Ahmad Lawan, is meant to “finance priority projects of the government and projects to support state governments.”

The committee, in the report, approved the sum of $500,000,000 and $750,000,000 respectively, as loans from the World Bank to cater for “States Fiscal Transparency Accountability and Sustainability program to provide fiscal support to States.”

The funds are also to factor in as “Covid-19 action recovery and economic stimulus program to support State-Level efforts to protect Livelihoods, ensure food security and stimulate economic recovery.”

Similarly, the upper legislative chamber of the National Assembly approved the sum of Nine Hundred and Ninety-Five Million Pounds from the Export-Import Bank of Brazil to cater for the 2020 revised budget requested by the executive.

The sum covers the “Green Imperative to enhance mechanization of agriculture and agro processing in Nigeria.”

In its findings, the committee disclosed that among others, a total of six indigenous assembly plant, one in each geopolitical zone would be rehabilitated and retooled to revitalize farm machinery and equipment to be imported from Brazil.

This is as it advised for restructuring and expansion of existing States Fiscal Transparency, Accountability and Sustainability, SFTAS programme, especially seeing the disruption and shock occasioned by the Covid-19 crises, in order to match the fiscal measures at the federal level and reallocating the undisbursed balance of the program funds.

The committee also disclosed that the said loans are to be sourced from multilateral and bilateral global lenders and partners with proven records of financial support to the country, even as it said that the borrowing which are concessional loans come with low interest rates, moratorium and a reasonable payback period.