PMB seeks new N2.342tr loan to finance 2021 budget
Caroline Ameh
President Muhammadu Buhari, on Tuesday, requested the Senate to approve a new external loan of N2,343,387,942,848.00, about $6.183billion, for the Federal Government to finance the 2021 budget deficit.
The Senate President Ahmad Lawan read President Buhari’s letter of request on the floor of the Senate at Tuesday’s plenary.
The letter reads “It is with pleasure that I forward the list of all the Donor funded projects under the 2018 — 2020 Federal Government External Borrowing (Rolling) Plan for the consideration and concurrent approval of the Senate for same to become effective”.
“The Projects listed under the 2018-2020 External Borrowing Plan are 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, IPEX, AFC, India EximBank and International Fund for Agricultural Development (IFAD) at a total sum of USD 36,837,281,256 plus Euro 910,000,000 and Grant Component of USD 10,000,000”.
According to the President’s letter, the listed projects form part of the 2018 — 2020 External Borrowing Plan and covered both the Federal and States Governments’ Projects and are geared towards the realization of the Nigeria Economic Sustainability Plan that cut across key sectors such as Infrastructure, Heaith, Agriculture and Food Security, Energy, Education and Human Capital Development and COVID 19 Response efforts.
Meanwhile, in another letter, the President also requested the resolution of the National Assembly for the implementation of the new eternal borrowing of N2.343 Trillion, that is about USD6.183 billion in the 2021 APPROPRIATION ACT.
The purpose of this Letter according to the President is to request for a Resolution of the National Assembly (NASS) to raise the sum of N2,343,387,942,848.00 (about USD 6,183,081,643.40 at the Budget Exchange Rate of USD1.00/N379) provided as New External Borrowing in the 2021 Appropriation Act (Item No. 033) to part-finance the Budget Deficit of 5.602 trillion.
He pointed out that 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). Section 21(1) of the DMO which states that “no external loan shall be approved or obtained by the Minister unless its terms and conditions shall have been laid before the National Assembly and approved by its resolution”, while Section 27(1) states that “the National Assembly may by a resolution approve, from time to time, standard terms and conditions for the negotiation and acceptance of external loans and issuance of guarantees”, the letter reads.
