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Senate Approves Buhari’s $5.513b Loan

President Muhammadu Buhari’s $5.513 billion external loan request to finance the revised 2020 budget was on Tuesday approved by the Senate.

It was approved after the presentation and consideration of the report of the Senate Committee on Local and Foreign Debts, Senator Clifford Odia (Edo Central) by the upper chamber.

Buhari has in his letter of request, said that the $5.513 billion external loans are to enable the Federal Government to fund the 2020 revised budget.

However, the components of the external loan which is to enable the Federal Government to execute its priority projects and for projects to support State Governments in stimulating their economy which has been adversely affected by the COVID-19 pandemic was stood down by the Senate due to lack of requisite details.

Lenders for the federal government’s priority projects as approved by the Senate are the AfDB – $125million to strengthen the healthcare system and improve response to COVID-19 and $23 million for financing smallholder farmers to mitigate food security impact of the COVID-19 Pandemic.

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Other sources are $600million from the Islamic Development Bank to support Nigeria’s response to challenges posed by COVID-19 and $500 million from the African Export-Import Bank to provide critical medical supplies to combat COVID-19.

However, the intention of the Federal Government to borrow Euro 995million from the Export-Import Bank of Brazil to support Green imperative and enhance the mechanisation of agriculture and agro-processing in Nigeria was put in abeyance by the upper chamber.

Also, the ongoing negotiation by the Federal Government with the World Bank for between $500million – $750 million for COVID-19 Action Recovery and Economic Stimulus Program to support state-level efforts to protect livelihoods, ensure food security and stimulate economic activities, has not been approved.

Additionally, $500 – $750 million also being negotiated with the World Bank for State Fiscal Transparency and Sustainability Program to provide financial support to the States was not approved.

The Committee said that it would consider the proposals when it gets requisite details on what the loans would be used for from the Minister of Finance, Budget National Planning, Mrs Zainab Ahmed.

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