Senate approves Buhari's request to borrow $5.5bn

Senate okays $5.5 billion loan for FG

Senate okays $5.5 billion loan for FG

Nigeria's Senate on Tuesday approved a request by President Muhammadu Buhari to seek $5.5 billion in foreign loans.

The senate's decision followed the adoption of a report by its Committee on Local and Foreign Debts at the plenary.

According to Buhari's letter on October 4, 2017, the external borrowing was captured in the 2017 budget which has a deficit of N2.35 trillion out of which N2.321 trillion is to be borrowed.

In the report, Sani explained that the issuance of USD2.5 billion will finance the 2017 appropriation Act, while USD3.0 billion would be used to refinance domestic debts. "The projects when completed will create jobs through exchange of downstream economic activities". "The projects will improve the federal government's revenue".

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Refinancing refers to the process of eliminating an existing debt with payments from another loan obtained under more favourable terms. With the $3bn to be used for refinancing domestic debts, local lenders owed by the federal government may now expect to be paid. He was however countered by Senator Gbenga Ashafa who argued that the loans were necessary to facilitate development across the country.

"He listed the projects as the Mambilla Hydropower Project; construction of a second runway at the Nnamdi Azikiwe International Airport; counterpart funding for rail projects and the construction of the Bode-Bonny Road, with a bridge across the Opobo Channel". "The executive has tried also to comply with laws that govern the seeking approval for loans", he said.

The government intends to spend money on infrastructure projects to diversify the OPEC member's oil-dependent economy.

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