The Senate has given a speedy approval to President Muhammadu Buhari’s request to raise a fresh loan of N850 billion from the domestic capital market to fund projects in the 2020 budget.
The lawmakers approved the loan request after suspending its relevant orders.
The president request was contained in a memo read by the Senate President, Ahmad Lawan on the floor of the Senate.
According to the president, borrowing from the international market is unattractive because of the COVID-19 pandemic and falling oil prices.
“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,” he said.
“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.”
The upper chamber also mandated its Finance and Appropriation Committees to liaise with the Finance Minister to obtain more details of the loan request.