Business Economy

Senate Approves Buhari’s $16bn, €1bn External Loan Request

The Senate yesterday approved the $16 billion, €1billion as well as a $125 million external loan request sent to it by President Muhammadu Buhari.

This followed a report by the Senate Committee on Local and Foreign Debt, which was read on the floor of the Red Chamber on a proposed 2018-2020 external borrowing (rolling) plan.

Chairman of the Committee, Senator Clifford Ordia, who read the report before his colleagues, recounted that on Tuesday, June 1, 2021, there was a request from the President Buhari for the Senate’s approval of the federal government’s 2018-2020 External Borrowing (Rolling) plan as contained in a communication dated 6th May 2021.

He said the 2018-2020 external borrowing (Rolling) plan contained a request for approval in the sum of $36,837,281,256, €910,000,000 and Grant Component of $10,000,000.

The loans are expected to fund infrastructure and human capital development projects.

The funding agencies include: the World Bank – $3,529,300,000; China Nexim Bank – $5,078,441,252; Industrial and Commercial Bank of China – $3,902,267,260; China Development Bank – $2,893,693,930; and the African Development Bank (AfDB) – $698,500,000.

Others are: French Development Agency – $345,000,000; European Investment Bank – $175,000,000;

EUROPEAN ECA/KfW/IPEX/AFC – $190,255,276; International Capital Market – $500,000,000 and Standard Chattered Bank/SINOCURE – $62,120,000, bringing the grand total of loans to $16,230,077,718 and €1,020,000,000.

However, concerns were raised by some Senators who pointed out that the report or the letter did not capture the terms and conditions for the loans.

This was followed by the call by the Committee that, “the terms and conditions of the loan from the funding agencies, be forwarded to the National Assembly for documentation.

In his submission, Deputy President of the Senate, Senator Ovie Omo-Agege argued that findings in the past had shown that there were blind spots in the contract documents that required clarification.

On his part, Senator Bamidele Opeyemi said he was concerned about the position the upper legislative chamber has put itself.

“It is a constitutional issue. There was also a letter from the president for the approval that is concurrence. He said it is not different from concurrence. The decision has been taken we are either to concur or not. What I have come to see is an approval and what we are doing is an approval,” he said.

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