The $5.5 billion loan sought by the Federal Government Monday has gotten a nod of the Senate for use in financing the 2017 budget and refinancing the foreign debts.
This came as the size of FGN’s total debt ticked up by 6.0 percent to N20.373 trillion in the third quarter, 2017.
Senator Shehu Sani, APC, Kaduna Central, who is Chairman, Committee on Local and Foreign Debts on the said loan, had presented a report and the Senate approved the report during Monday’s plenary presided over by the Deputy Senate President, Senator Ike Ekweremadu.
With the approval, the government is expected to embark on some capital projects provided in the 2017 budget in which the first part of the new loan amounting $2.5 billion would be applied.
The government is also expected to fulfil part of the unwritten agreement with the National Assembly for the loan approval which includes implementation of the constituency projects contained in the 2017 budget.
The second part of the newly approved loan amounting $3.0 billion would be applied to the refinancing of maturing domestic debt obligations through the issuance of Eurobonds or a loan syndication.
Presenting report of the committee, Shehu Sani, Kaduna-APC, said the projects listed for the loan would stimulate economic development and create direct and indirect jobs for Nigerians, adding that the $2.5 billion would create more borrowing space for the private sector.
Deputy Senate President, Senator Ike Ekweremadu, however, urged the Federal Government, through the Debt Management Office, DMO, to ensure that the debt profile of the country was not over bloated.
It would be recalled that President Muhammadu Buhari had on October 10, written to the Senate, asking for the new loan approval.
The four- page letter, addressed to Senate President, Bukola Saraki was entitled, “Request for the approval of External Loans for: 1. Implementation of the External Borrowing Approved in the 2017 Appropriation Act: 11 External Borrowing to Re- finance maturing domestic debts through the issuance of USD3.00 Billion Eurobond in the International Capital Market or through a loan syndication.”
The letter indicated that $3 billion would be sourced through Euro bond, the remaining $2.5 would come from other sources in the international capital market.
