The Nigerian Senate on Thursday approved a $2.209 billion (equivalent to N1.767 trillion) loan request by President Bola Tinubu to help address the N9.7 trillion deficit in the N28.7 trillion 2024 budget.
The approval, which came within 48 hours of receiving the President’s letter, highlights the urgency of financing critical development projects outlined in the 2024 Appropriation Act.
Fast-Tracked Deliberation
On Tuesday, President Tinubu formally requested approval from the National Assembly for the loan, emphasizing its importance in funding ongoing projects and economic programs. Following this, the Senate tasked its Committee on Local and Foreign Debts to review the proposal and provide recommendations within 24 hours.
Committee Report
Presenting the report, Senator Aliyu Wammako (APC, Sokoto North), Chairman of the Committee on Local and Foreign Debts, described the loan as critical for Nigeria’s growth and stability.
According to the report:
The loan will help finance ongoing projects and key programs in the 2024 Appropriation Act.
It aligns with Nigeria’s Debt Management Strategy by reducing borrowing costs, extending public debt maturity, and increasing external reserves.
The loan is to be raised through various instruments, including Eurobonds, Sukuk issuance in the International Capital Market (ICM), and syndicated loans, depending on market conditions.
Senate Recommendations
The Committee recommended that the Senate approve:
- The implementation of the new external borrowing of N1.767 trillion (equivalent to $2.209 billion) at the official exchange rate of USD1/N800.
- The issuance of Eurobonds amounting to $1.7 billion or more, capped at $2.209 billion, as part of the new borrowing strategy.
- The utilization of any exchange rate excess from adjustments (USD1/N1,640) for capital projects in 2024, ensuring funds are directed toward infrastructure and development for long-term growth.
Senate Approval and Commendation
Following the presentation, the Senate swiftly approved the loan request without opposition. The Deputy President of the Senate, Senator Jibrin Barau, who presided over the session, commended the Wammako-led Committee for its thorough analysis and timely delivery of the report.
Implications of the Loan
The loan will play a significant role in:
Reducing domestic market borrowing pressure.
Enhancing Nigeria’s external reserves.
Providing much-needed funding for capital projects and infrastructure development.
This approval underscores the Senate’s commitment to addressing Nigeria’s economic challenges while fostering growth through strategic investments.
