The Senate on Monday finally approved a $5.5billion loan request sent to it by President Muhammadu Buhari to allow the federal government to secure two external borrowings.
Against the backdrop of the upsurge in the country’s debt profile, which stood at N19.6 trillion as at June 30, 2017, some Nigerians, both individuals and groups, had kicked against request to borrow another loan, saying it was a way of mortgaging the future of Nigerians.
The governing All Progressives Congress (APC) and the Peoples Democratic Party, PDP had also engaged in a media tirade over the propriety of federal government’s borrowing plan.
While, the PDP had condemned the plan, accusing the APC of mismanaging the “buoyant economy” it inherited from it, the APC through its spokesman, Mallam Bolaji Abdullahi, lashed out at the opposition party, saying it was scaremongering over a loan the present administration was seeking to secure to fix the ailing economy the PDP mismanaged in its 16 years in power.
But the chairman of the Senate committee on Local and Foreign Debts, Senator Shehu Sani, has said that experts and public opinions would guide his committee’s decision before submitting its recommendations for consideration by the Red Chamber.
President Buhari had in a letter of request to the National Assembly dated October 4, 2017, said the external borrowings had been captured in the 2017 Appropriation Act, which has a deficit of N2.356 trillion and provision for new borrowings of N2.321 trillion.
Of the requested loan, Buhari had said issuance of $2 .5 billion in International Capital Market through Eurobonds or a combination of Eurobonds and Diaspora bonds will be used for the financing of the 2017 Appropriation Act and capital expenditure projects in the Act.
He further requested that issuance of Eurobond in the ICM and /or loans syndication by the banks in the sum of $ 3 billion will be for refinancing of maturing domestic debts obligations of the federal government.
Despite the controversy that trailed federal government’s decision, The Senate yesterday in plenary gave its nod to the request by giving President Buhari the go ahead to proceed with the external borrowings.
The approval by the Senate followed the adoption of the report by the Senate committee on Local and Foreign Debts, which were presented in plenary.
Presenting the report, Senator Shehu Sani (Kaduna Central) explained that the loan met Senate’s approval because it is in line with the borrowing plan of the 2017 Appropriation Act.
According to Sani, the terms of the loan are favourable and do not pose any compromise of the integrity, independence and interest of the country and it citizens.
He further stated that the projects to be executed with he loan are essential for economic and social development, adding that when completed, the projects will create jobs.
Deputy Senate president, Ike Ekweremadu, who presided over yesterday’s plenary, noted that the upper chamber will continue to support all efforts by the executive to boost the economy as long as such fiscal instruments are for the betterment of the Nigerian people.
The Senate assured that it will properly oversight all the projects that the loans are meant to support in the 2017 budget.