The Nigerian Senate, yesterday, approved the sum of $16 billion, €1 billion and a grant of $125 million as foreign loans for President Muhammadu Buhari to fund his administration’s legacy projects.
The upper chamber specifically approved the issuance of €500 million from the Bank of Industries and €750 million Eurobond in the International Capital Market. It asked the President to forward the terms and conditions of the loans from the funding agencies to the National Assembly.
By implication, the country now expends all its revenue in servicing recurrent expenditure and debts, which also means that the Federal Government will have no choice but to keep borrowing, and thereby further increasing the nation’s external debt profile.
The Federal Government had in July 2021, disclosed that it spent N1.8 trillion on debt servicing in the first five months of the year, representing about 98 per cent of the total revenue generated in the same period.
N4.86 trillion was spent by the Federal Government between January and May 2021. While recurrent expenditure in the review period stood at N3.67 trillion, debt service was N1.8 trillion.
The Senate approval comes after the report of its Committee on Local and Foreign Debts, chaired by Senator Clifford Ordia.
“The projects will stimulate a rebirth of commercial and engineering activities and the consequent tax revenues payable to government as a result of these productive activities will increase.
“It will be recalled that the Senate at plenary in July 2021 approved financing for projects as recommended by the Committee. Subsequently, on September 15, 2021, the Senate President read another communication from the President containing an addendum to the 2018-2020 External Borrowing (Rolling) Plan in the sum of $4,054,476,863, €710,000,000 and Grant Component of $125,000,000 for various projects and same was also referred to the committee for further legislative action.
“The committee found that out of a sum of over $22.8 billion approved by the National Assembly under the 2016-2018 external borrowing rolling plan, only $2.8 billion, that is 10 per cent, has been disbursed to Nigeria,” Ordia said.©Standard Gazette, 2021. Unauthorized use and/or duplication of this material without express and written permission from this site’s publisher is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Standard Gazette with appropriate and specific direction to the original content.