The Nigerian Senate has approved a request by President Muhammadu Buhari to secure loans worth $8,325,526,537 and €490,000,000 under the 2018-2020 External Borrowing (Rolling) Plan.
The plan was approved following the consideration of a report on the 2018-2020 External Borrowing (Rolling) Plan by the Committee on Local and Foreign Debt.
The Committee Chairman, Sen. Clifford Ordia, in his presentation on the floor of the Senate, said the committee noted the genuine and very serious concerns of Nigerians about the level and sustainability/serviceability of Nigeria’s borrowings in the last 10 years.
He said, “… Our (Nigeria’s) debt service figures constitute a huge drain on our revenue to the extent that it accounts for over 30 per cent of our expenditure in the annual budget.”
Ordia explained that due to a shortfall in the country’s annual revenue relative to the need for rapid infrastructural and human capital development: “every year, we have passed deficit budgets which require us to borrow money to cover the deficit.”
Among the total borrowing request of $36,837,281,256 in the re-forwarded request of the President, $26,154,536,533 is to be borrowed from various financial institutions from the People’s Republic of China.
He noted that most proposed projects in the Ministries of Transportation, FCT, Aviation, Works and Housing, Agriculture, Water Resources, and some commissions were ongoing projects for which External Borrowed funds were previously used, including loans.
“These projects have a great multiplier effect on stimulating economic growth through infrastructure development, job creation and poverty alleviation, stimulation of commercial and engineering activities, and the consequent tax revenues payable to government as a result of these productive activities,” Ordia explained.
A breakdown of the proposed loan showed the country expected to receive $796,000,000 from the World Bank; China Exim Bank ($2,901,026,509); Industrial Commercial Bank of China ($2,484,555,304); African Development Bank ($104,200,000); Africa Growing Together Fund ($20,000,000); French Development Agency (€240,000,000); European Investment Bank – €250,000,000; European ECA/KfW/IPEX/AFC ($1,959,744,724); and International Fund For Agricultural Development (IFAD) – $60,000,000.”