President Buhari Seeks Legislative Approval for $6bn Loan

In a letter on Tuesday to both chambers of the legislative, the President sought their agreement with his intention to request for another loan from multilateral and bilateral organisations.

The loan, at the official exchange rate of N379/$ will amount to N2.3trn.

President Buhari in the letter read by the Deputy Speaker of the House of Representatives, Idris Wase and the Senate President, Ahmed Lawan to the members of their respective chambers, said the money will partly fund the deficit in the 2021 budget.

The 2021 budget has a deficit of N5.6trn, with the national assembly already approving a loan request of N4.6trn in the appropriation act submitted by the federal government.

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Buhari wrote that the 2021 Appropriation Act provides for N4,686,775,885,696.00 as New Borrowings (item No. 328) to part-finance the 2021 Fiscal Deficit, of which 50% or N2,343,387,942,848.00 (about USD 6,183,081 ,643.40 at the Budget Exchange Rate of USD1.00/N379) is specified as New External Borrowing.

He further noted that “the allocation of N2.343 trillion to New External Borrowing in the 2021 Appropriation Act is consistent with Nigeria’s Debt Management Strategy, which seeks amongst other objectives, to moderate ‘debt service costs by accessing relatively cheaper external funds, and to free-up space in the domestic market for other borrowers.”

The President also revealed that the Nigerian government can now access International Capital Markets (ICM) for loans with a proposal of €3bn loan from ICM on the cards.

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