The Senate on Tuesday approved President Muhammadu Buhari’s loan request of N850 billion to fund the 2020 budget.
Senate President, Ahmed Lawan, read out the letter containing Buhari’s request to the lawmakers during the day’s plenary.
In the letter, Buhari asked that the loan be raised from the domestic capital market, noting that borrowing from the international market is unattractive because of the COVID-19 pandemic and falling oil prices.
Buhari had said in the letter: “Furthermore the senate may wish to know that the borrowing from the external capital market increases Nigeria’s external reserves, provides access to lower cost and as well as avoids crowding out of private sector borrowers who wish to access the domestic capital market.
“However, recent developments in the global economic environment as a result of the coronavirus pandemic and the decline in international oil prices has made it less attractive to borrow from the international market at this time.
“To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget. I hereby seek the senate’s approval by resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of the international capital market.”
After reading the letter, the upper legislative chamber gave its approval while Lawan consequently directed the committees on finance and appropriations to get more details of the loan request from the ministry of finance.