Senate approves Buhari’s N850bn loan request to fund 2020 budget

President Muhammadu Buhari has asked the national assembly to approve a loan request of N850 billion to fund the 2020 budget.

The president’s request was contained in a letter read by Senate President Ahmad Lawan on Tuesday.

Buhari asked that the loan be raised from the domestic capital market.

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 senate approved the loan after giving it “speedy consideration”, suspending its relevant orders.

Lawan directed the committees on finance and appropriations to get more details of the loan request from the ministry of finance.