President Muhammadu Buhari wrote to the Senate and the House of Representatives, requesting permission for a $5.513 billion fresh loan.
In a letter read by House of Representatives Speaker Femi Gbajabiamila at Thursday’s plenary session, the president said the loan was to cover the 2020 budget deficit, fund vital projects and help some federation states.
Senate President Ahmad Lawan read a similar letter during a plenary session of the Senate on Thursday.
Breakdown:
For the proposed external loan to finance the revised budget, the president listed four lenders. They include:
-International Monetary Fund – $3,400,000,000
-World Bank – $1,500,000,000
-African Development Bank – $500,000,000
-Islamic Development Bank – $113,000,000
For the priority projects for the federal government, the lenders are:
-African Development Bank – $125 million “to strengthen the healthcare system to improve response to COVID-19” and $23 million for “financing smallholder farmers to mitigate food security impact of COVID-19.”
-Islamic Development Bank – $600 million for support of Nigeria’s response to challenges posed by COVID-19.
-African Export-Import Bank – $500 million for provision of critical Medical supplies to combat COVID-19.
-Export-Import Bank of Brazil – €995 million for Green imperative to enhance mechanisation of agriculture and agro-processing in Nigeria.
World Bank, African Export-Import Bank and Brazil’s Export-Import Bank are the borrowers for projects to finance different ventures for state governments.
The President also presented both chambers of the National Assembly with a revised 2020 Appropriation Bill and the Medium Term Expenditure Framework and Fiscal Strategy Paper for 2020-2022.
He said it has become appropriate to pass the MTEF / FSP 2020-2022 and amend the appropriation act 2020 in view of the rapid decline in crude oil prices and the reduction of the COVID-19 pandemic in Nigeria’s crude oil output quota.
“In effect, the assumptions underlying the 2020 appropriation act are no longer sustainable. It is also imperative to adjust expected revenues disruptions and economic activities as well as international trade and transportation due to the measures implemented across the world to curtail the spread of COVID-19 pandemic.
“Furthermore, it is necessary to reallocate resources in the appropriation act 2020 to ensure implementation of required emergency measures and other actions necessary to mitigate socio-economic effects of COVID-19 pandemic,” part of the letter read.
The President’s loan request comes weeks after the National Assembly approved a N850bn loan to the Federal Government, and the Senate approved another $22.79bn loan that is pending before the House at present.
According to the Debt Management Office, however, the N850 billion loan was not fresh but a conversion of a proposed foreign loan into domestic borrowing.
