Barely a fortnight after Finance Minister Wale Edun said Nigeria is not in a position to depend on foreign borrowing to fund its 2024 budget, President Bola Tinubu has urged the Senate to consider and approve his request to obtain a loan of $8,699,168,559 and €100 million as part of the 2022 – 2024 external borrowing plan of the federal government.
Tinubu’s letter of request was read during Tuesday’s plenary by Senate President, Godswill Akpabio, which explained that the facility is for critical infrastructure in areas such as power, roads, water, railway, and health.
Tinubu stated that the World Bank and African Development Bank have indicated interest in supporting the loan with $ 1 billion and N1.5 billion respectively.
Tinubu’s letter titled: “2022-2024 external borrowing plan” reads: “I write in respect of the above subject and to submit the attached Federal Government 2022-2024 external borrowing plan for consideration and early approval of the National Assembly to ensure prompt implementation of the projects.
“The Senate may wish to note that the past administration approved a 2022-2024 borrowing plan by the Federal Executive Council (FEC) held on May 15, 2023.
“The project cuts across all sectors, with specific emphasis on infrastructure, agriculture, health, water supply, roads, security, and employment generation as well as financial management reforms.
“Consequently, the required approval is in the sum of $8,699,168,559 and €100 million.
“I would like to underscore the fact that the projects and programmes in the borrowing plan were selected based on economic evaluations as well as the expected contribution to the social economic development of the country, including employment generation, and skills acquisition.
“Given the nature of these facilities, and the need to return the country to normalcy, it has become necessary for the Senate to consider and approve the 2022- 2024 external abridged borrowing plan to enable the government to deliver its responsibility to Nigerians.”
After reading the presidential communication to his colleagues, Senate President Akpabio referred the executive request to the Senate Committee on Foreign and Local Debts for further legislative work and to report at plenary in one week.
Edun, who is the coordinating minister for the economy, had in an opening statement to the joint Senate Committee examining the 2024-2026 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF-FSP), asserted that it would be too expensive for a developing country to gain access to foreign loans.
His words, “Clearly, the environment that we have now, internationally, as well as nationally, we are in no position to rely on borrowing. We have an existing borrowing profile. Our direction of tariff is to reduce the quantum of borrowing or intercepting deficit financing in the 2024 budget.”