Senate approves Buhari's loan requests of $1.5 billion and €995 million.

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Adding to our loan portfolio, the Senate has approved President Muhammadu Buhari’s loan requests of $1.5 billion including a €995 million external loan.

According to the People’s Gazette, Senators approved the loans on Wednesday and the approval was sequel to the consideration of the report of the Senate Committee on Local and Foreign Debts presented by its Chairman, Clifford Ordia (PDP-Edo), during plenary.

Buhari had sent a letter in May 2020 to the Senate seeking approval for another batch of external loans to finance its regime’s 2020 budget deficit, critical projects and support some of the state governments.

In his explanation, he said he would use the loans to execute prioritised projects and support state governments in stimulating their economy adversely hit by the COVID-19 pandemic.

In his presentation, Mr Ordia noted that the borrowings were loans with low interest rates and a reasonable moratorium and payback period.

He pointed out, “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.

“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.”

The approved loans included the $750 million from the World Bank for states, fiscal transparency, accountability, and sustainability (SFTAS) programme to provide financial support to states.

There is also the World Bank’s $750 million for the COVID-19 Action Recovery and economic stimulus programme to support state-level efforts to protect livelihoods, ensure food security and stimulate economic activity (N-CARES).

The continuous borrowing of loans from foreign countries by the president to service its acclaimed big projects has led to an exponential increase in Nigeria debt.

It was gathered that as of December 2020, Nigeria’s debt profile stood at N32.915 trillion as against N32.222 trillion in September of the same year.