The national assembly has approved loans of $28.2 billion sought by President Muhammadu Buhari.
While the senate granted the president’s request to borrow $5.5 billion for COVID-19 and “priority projects”, the house of representatives also approved a $22.7 billion which was rejected last year.
The green chamber approved the request at Tuesday’s plenary session after it considered the report of its committee on aids, loans and debt management.
When he sent the request in 2019, Buhari said the loan will be used to finance key infrastructures in the country.
But some lawmakers particularly those in the south-east kicked against the move, alleging that the region was excluded in the loan’s implementation plan.
The criticisms had led to suspension of the loan approval which has now been debated and passed after much plea from Femi Gbajabiamila, the speaker.
Gbajabiamila said every step to address the issues raised against the loan request was met by legal blocks “in the sense that agreements have already been made and cannot be approved”.
“So, it is either we approve wholesale or not approve,” he said.
The speaker, however, added that the house was able to get the executive to agree to insert projects from the south-east and north-east into the next borrowing plan.
“For the first time, we added a clause specifying certain projects. We met and demanded for the commitment of the executive that these projects must be considered in the next borrowing plan and we got their words,” he said.
“I am only seeking for the understanding of our colleagues from the north-east and south-east. All of us will agree that there is a massive wide infrastructural deficit in this country and we need to bridge that gap.
Buhari first sent the loan request to the previous national assembly under Bukola Saraki but it was rejected.
However, at the senate on Tuesday, the $5.5 billion loan request was approved after Clifford Ordia, chairman committee on local and foreign debts, presented a report on the floor of the upper legislative chamber.
Ordia said his committee considered all aspects of the president’s request before recommending that its approval.
“The committee observed that the financing is being sourced from Multilateral and Bilateral global donor Lenders and partners with proven track record of previous financial accommodation and support to the federal government,” he said.
“The committee notes that as regards the IMF loan, there are no usual onerous conditions for borrowing, such as Currency Devaluation and Deregulation of Certain Sectors of the Economy attached to this loan.
“The committee notes that the borrowings are largely concessional loans with low interest rates and very long moratorium and payback period.”
A breakdown of the loan request shows that $1.5 billion will come from the World Bank, $500 million from the African Development Bank (AfDB), and $113 million from the Islamic Development Bank.
The president said the loan would be used to finance priority projects as well as serve as relief owing to the COVID-19 pandemic.
“The COVID-19 pandemic has also created the need for additional expenditure in the health sector,” Buhari had said.
“All of these have necessitated a review of the 2020 budget and the medium-term expenditure framework.”
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