Senate Approves Tinubu’s Request To Borrow $7.8bn, €100m

The Senate has confirmed President Bola Tinubu’s request to borrow $ 7.8 billion and €100 million as part of the 2022 – 2024 borrowing plan of the Federal Government.

The request was confirmed after the Senate considered and adopted the report of its committee on Local and Foreign Debt during Saturday’s plenary.

Tinubu had stated that the Federal Executive Council under former President Muhammadu Buhari approved the loan facility on May 15, 2023, to finance health, education, infrastructure, agriculture, insecurity, and other sectors.

The president further said that the foreign loan has become paramount to bridge the financial gap and return the economic activities of the country to normalcy, adding that it would be used to develop infrastructure, agriculture, health, education, water supply, security, and employment as well as financial management reforms.

Also, the Red Chamber also approved Tinubu’s request to securitise the Central Bank of Nigeria N7.3trn Ways and Means advances to the Federal Government.

Tinubu had, in a letter read by the Senate President yesterday, stated that the securitisation intends to reduce debt service costs and extend the repayment period of the existing loans.

The Ways and Means provision allows the government to borrow from the Central Bank if it needs short-term or emergency financing to support delayed government projected cash receipts of fiscal shortfalls.

The interest rate for the securitised Ways and Means advances has been reduced to 9% per annum, compared to the MPR of 0.3%.

“The savings arising from the much lower interest rate will have to reduce the deficit in the budget,” Tinubu said.