The Nigerian senate on Tuesday approved the 2025-2026 external borrowing plan of $21.5billion presented by President Bola Tinubu for consideration.
Also approved was a loan request of 15 billion Japanese Yen and 65 million Euros grant.
The senate also approved the issuance of Federal Government Bond of N757 billion for payment of accrued rights pension arrears as at December 2023 for the Contributory Pension Scheme, CPS.
The upper chamber equally approved President Tinubu’s request of capital raising of up to $2 billion through a foreign-currency denominated instrument in the domestic market.
The approval was sequel to the presentation and consideration of the report of Committee on Local and Foreign Debt by Chairman of the Committee, Senator Aliyu Wamakko (APC, Sokoto North).
The Tinubu-led government had claimed that the loan request was designed to fund various critical national critical development projects across key sectors of the economy.
In his presentation, Wamakko noted that the loan request was part of the already approved Medium Term Expenditure FrameWork, MTEF, and Fiscal Strategy Paper, FSP, for the 2025 budget.
He said the MTEF and FSP contained most of the items in the borrowing plans, adding that based on the findings, the committee recommended that the Senate approved the president’s request.
On his part, Chairman, Senate Committee on Appropriations, Senator Solomon Adeola (APC Ogun West), who seconded the motion, said the approval was largely a formality, as most of the items had already been outlined in the MTEF and 2025 budget previously passed by National Assembly.Adeola said:
“The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget.”
In his contribution, Chairman, Senate Committee on Finance, Senator Sani Musa (APC, Niger East), who noted that the borrowing plan covered a six-year disbursement period and not just the 2025 fiscal year, said Nigeria has not defaulted on any of its existing loan repayments.
Musa said: “There’s no economy that grows without borrowing. What we are doing is in line with global best practices.”
On his part, Senator Adetokunbo Abiru (APC Lagos East), assured that the loan request complied with the Fiscal Responsibility Act, FRA, and the Debt Management Act, saying the funds
He said: “These loans are long-term, concessional and come with favorable repayment terms. Some stretch between 20 and 35 years.”
However, Senator Abdul Ningi (PDP-Bauchi Central), who raised concerns that the committee in its document did not indicate how the loan would be repaid, said there was need to detail how the loan sought after would be used to impact constituents.
