Senate has begun the consideration of $6.18bn( N2.3 trillion) External Loan request by President Muhammadu Buhari to fund the 2021 budget deficit. The President of the Senate, Senator Ahmad Lawan thus referred the request to the Senator Clifford Ordia, Committee on Local and Foreign Debts to report back at Plenary in two weeks. The action of the President of the Senate was sequel to the Executive Communication of 2018 – 2020 by the Senate Leader, Senator Yahaya Abdullahi that the Senate do consider the request of President Muhammadu Buhari on the approval of Donor Fund Projects under the 2018- 2020 Federal Government External Borrowing( Rolling) Plan. President Buhari had written the Senate last month, seeking for the approval of another external loan to the tune of $6,18 billion, an equivalent N2,343,387,942,848.00, about for the Federal Government to fund the 2021 budget deficit.
The request by President Buhari was contained in a letter read at plenary by the President of the Senate. According to Buhari, the proposed loan which is equivalent of N2.3trn is to finance the 2021 budget deficit of N5.6trillion, just as he explained that the loan would enable the Federal Government fund critical infrastructural projects in transportation, health and education,m among others. Two letters from the President with regard to the approval of external loans were read by Lawan. In a another letter, Buhari urged the Senate to give concurrent approval for donor fund projects under the 2018-2020 Federal Government External Borrowing (Rolling) Plan, at a total sum of $36,837,281,256.00 plus Euro 910,000,000.00 and grant component of $10,000,000.00 to become effective.
President Buhari had said that the approval would enable projects listed under the 2018-2020 External Borrowing Plan to be financed through sovereign loans from the World Bank, African Development Bank (AfDB), French Development Agency (AFD), Islamic Development Bank, China EXIMBank, China Development Bank, European Investment Bank, European ECA, KfW, lPEX, AFC, India EximBank and International Fund for Agricultural Development (IFAD). He explained that the projects are geared towards the realisation of the Nigerian Economic Sustainability Plan that cut across key sectors such as Infrastructure, Health, Agriculture and Food Security, Energy, Education and Human Capital Development and COVID 19 Response efforts in the six geo-political zones of the country. President Buhari’s letter was titled: “Request for the resolution of the National Assembly for the implementation of the new external borrowing of N2.343trillion (about $6.183billion) in the 2021 Approved Act.” In the letter the Presidency asked the Senate to raise the sum of N2,343,387,942,848.00 (about USD6,183,081,643.40 at the budget exchange rate of USD1.00/N379 provided as New External Borrowing in the 2021 Appropriation Act, (Item No. 330), to part-finance the budget deficit of N5.602trillion. According to the letter, the request is in line with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (Establishment, Etc.) Act, 2003 (DMO Act).