The Nigerian Senate has granted approval for a substantial portion of President Bola Tinubu’s external borrowing plan for 2022-2024, endorsing a loan of $7.8 billion and €100 million. This decision follows Tinubu’s initial request in November 2023 for a total loan of $8.7 billion and €100 million, with the approved amount representing 89.7% of the proposed dollar loan.
The Senate’s approval was reached after a comprehensive consideration of the report presented by its committee on Local and Foreign Debt during the Saturday plenary session.
While the majority of the loan request received approval, the Senate chose to withhold full authorization until the necessary information is submitted by the relevant agencies. The committee emphasized the importance of obtaining outstanding details before giving the green light to the remaining loan request.
The committee’s report highlighted the essential need for the loans, citing a shortfall in the country’s annual revenue to meet the demands for rapid infrastructure and human capital development. Assuring economic sustainability and sovereignty, the report underscored the favorable aspects of the loan, including low-interest rates, extended moratorium, and repayment periods.
In November 2023, President Tinubu sought Senate approval for the external borrowing plan, emphasizing the financing requirements across various sectors such as health, education, infrastructure, agriculture, and security.
The Federal Executive Council, under former President Muhammadu Buhari, endorsed the loan facility on May 15, 2023, aiming to address financial gaps and restore economic activities to normalcy. The funds are earmarked for critical areas, including infrastructure, agriculture, health, education, water supply, security, employment, and financial management reforms.
Senate President Godswill Akpabio conducted a voice vote, with lawmakers voting in favor of approving the endorsed portion of the loan. The decision is expected to impact the trajectory of the country’s external debt, which experienced a decrease in the third quarter of 2023 but is anticipated to witness an upward trajectory in subsequent quarters.
