Senate considers Buhari’s $5.5bn loan request

The senate on Thursday begun consideration of the approval of the $5.5 billion loan request of President Muhammadu Buhari.

Ike Ekweremadu, deputy senate president, referred the president’s request to the local and foreign debt committee after Ahmed Lawan, senate leader, moved for its consideration.

The committee is expected to report back to the upper legislative chamber in two weeks.

According to a letter which Buhari wrote to the senate, $2.5 billion will be used to finance the 2017 budget, while $3 billion will be used to re-finance domestic debts.

In the letter, the president explained that the proposed sourcing of $3 billion from external sources to refinance maturing debts would not lead to an increase in public debt profile‎.

“Implementation of the external borrowing plan approved in the 2017 appropriation Act. External borrowing to refinance maturing domestic debts through the issuance of $3 billion Euro bond in the international capital market or through a loan syndication,” the letter read.

“The senate may wish to refer to 2017 appropriation Act which has a deficit of 2.356 trillion and provisions for near borrowings 2.321 trillion. The Act also provides for 1.254 trillion and external borrowing of 1.067 trillion about $3.5 billion. Issuance of $2.5 billion for financing the 2017 appropriation Act.

“The senate may wish to know that in order to implement the external borrowings approved by the national assembly in the 2017 appropriation act, the FGN issued $300 million diaspora fund in the International Capital Market ICM in June 2017.

“The balance of the 2017 external borrowing in the sum of $3.2 billion is planned to be partially sourced in the ICM of $2.5 billion through Eurobonds or a combination of Eurobonds and Diaspora bonds while $700 billion is proposed to be raised from multilateral sources.”