Buhari seeks Senate’s approval for $5.513b external loan

By Sanni Onogu and Gbade Ogunwale, Abuja

President Muhammadu Buhari yesterday asked the Senate to consider and approve his request to borrow $5.513 billion from external sources.

Buhari’s letter of request for external borrowing was read by Senate President Ahmad Lawan on the floor during plenary.

In the letter, Buhari said the $5.513 billion external loan is to enable the Federal Government fund the 2020 revised budget, execute Federal Government’s priority projects and for projects to support state governments  in stimulating their economy which has been adversely affected by the COVID-19 pandemic.

The President said the loan to fund the 2020 revised budget is being expected  from multilateral institutions like the International Monetary Fund (IMF) $3.4 billion, World Bank $1.5billion, African Development Bank (AfDB) $500million and the Islamic Development Bank (IDB) $113million.

For the Federal Government’s priority projects, the lenders are the AfDB – $125million to strengthen healthcare system and improve response to COVID-19 and $23 million for financing smallholder farmers to mitigate food security impact of the COVID-19 Pandemic.

It is also to source $600million from the Islamic Development Bank to support Nigeria’s response to challenges posed by COVID-19 and $500 million from the African Export-Import Bank to provide critical Medical supplies to combat COVID-19.

The Federal Government also intends to borrow Euro 995million from the Export-Import Bank of Brazil to support Green imperative and enhance the mechanisation of agriculture and agro-processing in Nigeria.

Buhari said that the Federal Government is negotiating with the World Bank for between $500million – $750 million for COVID-19 Action Recovery and Economic Stimulus Program to support state-level efforts to protect livelihoods, ensure food security and stimulate economic activities.

He said that another $500 – $750 million is being negotiated with the World Bank for State Fiscal Transparency and Sustainability Program to provide fiscal support to the states.

Buhari noted that the Islamic Development Bank has indicated that only $113million of financing will be available to the Federal Government in the 2020 fiscal year to finance the government’s COVID-19 response, which will come from restructuring of previously approved but inactive facilities for Nigeria.

However, the Peoples Democratic Party (PDP) has raised the alarm over President Muhammadu Buhari’s fresh loan request of $5.5 billion from different international financial institutions.

The party said that with the volume of foreign loans being accumulated by the administration, the nation and her people have been placed on the international auction market.

In a statement yesterday,   the PDP Spokesman, Kola Ologbondiyan, flayed the President’s decision to take a fresh $5.513 billion (N2.1 trillion) loan, in addition to an earlier $22.79 billion (N8.5trillion).

According to the PDP, the administration did not have operable repayment plans for the loans, a situation it said, could totally compromise the country’s fiscal integrity and open her up for economic annexation by foreign creditors.

Recalling that the government had recently secured another N850 billion from the capital market, the party said it’s regrettable that the administration has been going cap in hands to shop for more foreign loans.

The PDP further said it’s alarming that the Federal Government could not muster the capacity to harness the huge resources available in the country to generate even half of its own budget for the current fiscal year.

The main opposition party said the Buhari administration is practically driving the nation to the brinks.

It added that the government was exposing Nigerians to the risk of modern day slavery by mortgaging their future to economic appropriation by foreign interests.