Nigeria: External Loan Requests worth $1.5bn, €995m approved by Senate

The Nigeria Senate on Wednesday approved external loan requests worth $1.5billion and €995million from Mohammadu Buhari, the President of the country, according to a report by Vanguard.

The approval was a follow-up to the consideration of the report of the Committee on Local and Foreign Debts presented by Clifford Ordia (PDP-Edo), its Chairman, during plenary.

In May 2020, Buhari sent a letter to the senate asking approval for another batch of external loans to allow the administration to finance the 2020 critical projects, budget deficit, and support some states of the federation.

Ordia in his presentation said that the borrowings were loans with a reasonable moratorium, low-interest rates and payback period.

"No unusual or onerous conditions attached to the terms of the loans and do not in any manner compromise the sustainability of the Nigerian economy or impugn the integrity and independence of Nigeria as a sovereign nation," Ordia said.

He further added "the loan is in the immediate best interest of the Nigerian state and its citizens in dealing with the COVID-19 pandemic in a way that the economy will be positioned for quick recovery and resume growth. While Nigeria's total public debt stock is on the increase, it is still relatively low vis-à-vis the country's GDP and the increased borrowing requirements is needed to sustain economic recovery."

Following are the approved loans: "$750 million from the World Bank for states, fiscal transparency, accountability and sustainability (SFTAS) program to provide fiscal support to states... World Bank's $750 million for the COVID-19 Action Recovery and economic stimulus program to support state-level efforts to protect livelihoods, ensure food security and stimulate economic activity (N-CARES)."