Senate, Reps Approve $2.35bn External Loan For Tinubu

The Senate and the House of Representatives, at separate sessions on Wednesday, approved another external loan request of $2.347 billion for President Bola Tinubu.

The loan, which is coming from the international capital market, is meant for financing the 2025 budget deficit and maturing Eurobonds.

The legislative approval in the House of Representatives was a sequel to the consideration and adoption of a report presented by the House Committee on Aids, Loans and Debt Management.

Chairman of the Committee, Rep. Abubakar Nalaraba, presented the report during the plenary session, presided over by Speaker Tajudeen Abbas.

The lawmakers in both chambers approved an additional $500 million Sukuk to enable the administration to bridge the infrastructure gap.

The President’s request for the loans was first transmitted to the National Assembly on October 8.

Senator Aliyu Wamakko, who presented a committee report that led to the approval, said the borrowing was vital for Nigeria’s economic stability and project continuity.

Wamakko stressed the need for the country to maintain its credit reputation in the international financial system
with the borrowing.

According to him, the approval would enable the federal government to meet its 2025 funding needs without disrupting its other fiscal commitments.

The chairman of the Senate Committee on Finance, Sani Musa, said the loans were critical for the effective implementation of the 2025 Appropriation Bill.

He added that the borrowing was already captured in the fiscal projections.

“It is very necessary that we give approval to this request so that the 2025 appropriation will be given the necessary funding,” Senator Musa said.

On his part, Senator Tokunbo Abiru, who is the Chairman of the Senate Committee on Banking, Insurance and Other Financial Institutions, argued that the new borrowing would not add to the country’s debt burden.

Abiru said, “This is more of a compliance issue because the 2025 Appropriation Act has already captured it as part of the deficit financing.

“The second request is a refinancing arrangement to ensure that the country does not default on Eurobond servicing,” Abiru added.

Senator Adams Oshiomhole (Edo North), similarly, defended the borrowing, arguing that loans, when targeted at productive sectors, could drive economic recovery and generate employment.

“There is nothing wrong with borrowing if it is properly structured and used to address critical issues like unemployment and infrastructural decay,” Oshiomhole said.

The National Assembly’s approval comes in the backdrop of a heated debate over Nigeria’s rising debt profile.

According to the Debt Management Office (DMO) records, Nigeria’s debt currently stands at over N97tn.

Source: TheWhistler | Read the Full Story…