Senate approves FG’s plan to borrow $1.5b, 995m euros

Senate on Wednesday approved $1.5billion and Euro 995 million external loans for the Federal Government.

This came on the heels of the consideration of a report of the Senate Committee on Local and Foreign Debts on the external borrowing plan of the government at plenary.

Chairman of the committee, Senator Clifford Ordia, presented the report on loans sourced from the World Bank, Brazil and Germany.

The recommendation of the committee “that the Senate do approve the external borrowing of $1,500,000,000 and €995,000,000” from the World Bank, Export-Import Bank of Brazil (BNDES), and Deutsche Bank of Germany, was approved by senators when it was put to a voice vote by Senate President Ahmad Lawan”.

Ordia explained that $1.5billion will be sourced from the World Bank for states experiencing financial difficulties caused by COVID-19 to finance projects and programmes like States Fiscal Transparency, Accountability and Sustainability (SFTAS) and COVID-19 action recovery and economic stimulus programme known as N-CARES.

He said: “The committee most importantly notes that the indicative terms and conditions under which the loan will be borrowed, there are no unusual or onerous conditions attached and the terms do not in any manner compromise the sustainability of the Nigerian economy or impugn the integrity and independence of Nigeria as a sovereign Nation.

“The committee finally notes that the loan is in the immediate best interest of the Nigerian State and its citizens in dealing with the COVID-19 pandemic in a way that the economy will be positioned for quick recovery and resume growth.

“The committee notes that while Nigeria’s total public debt stock is on the increase, it is still relatively low vis-a-vis the country’s GDP. The borrowings are needed to sustain the economic recovery.”

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