The request by President Muhammadu Buhari to borrow a total of $2.7 billion out of the $5.5 billion external borrowing has been approved by the National Assembly
The external loans comprise $1.5 billion, to be sourced from the World Bank, and €995 million ($1.2 billion) from other international agencies, for the federal and state governments.
If the loans are accessed, it will jack up Nigeria’s total public debt, which as of December 31, 2020 was N32.915 trillion ($84.574 billion), according to data from the Debt Management Office (DMO), according to ThisDay.
Of this, 37.82 per cent was external, while the balance of 62.18 per cent was domestic.
The Senate also approved N257,183,671,694.71) for the Nigeria Customs Service (NCS) for the 2021 fiscal year.
The approval for the external borrowing, at yesterday’s plenary, followed the consideration and adoption of a report of the Senate Committee on Local and Foreign Debts, chaired by Senator Clifford Ordia (Edo Central).
President Muhammadu Buhari had last May requested the Senate to approve the external borrowing to finance various priority projects of the federal government and to support the state governments facing fiscal challenges.
Ordia, while presenting the report, said $1.5 billion would be sourced from the World Bank to finance projects of state governments facing fiscal challenges arising from the COVID-19 pandemic, while the €995 million would be sourced from other multilateral and bilateral global lenders.
The tenor/moratorium of the loan to be sought from the World Bank is 25 years at an interest rate of 2.45 per cent per annum; while that from the Export-Import Bank of Brazil is for 15 years at an interest rate of 2.935 per cent; and the loan request from the Deutsche Bank of Germany for seven years at a 2.87 per cent interest rate.
The lenders, according to him, have proven track record of previous financial accommodation and support to Nigeria.