The Senate on Tuesday suspended its standing rules and gave accelerated approval to President Buhari’s request to raise a fresh loan of N850 billion from the domestic capital market to finance projects in the 2020 budget.
The Senate gave the approval after it stepped down rule one which, stipulates that the Senate can regulate itself in a sessional circumstance and give approval to urgent requests.
The motion on suspension of the standing rule was moved by the Senate Leader, Yahayah Abdullahi and approved by Senate President, Ahmad Lawan.
Lawan had asked committees on finance, appropriation to liaise with the finance minister to get more details on the loan request.
Buhari, in a letter which was read in plenary by Senate President, Ahmad Lawan explained that the loan is to ensure adequate funds to finance projects outlined in the 2020 budget.
Buhari said the loan, if approved by Senate, would be sourced from domestic capital market.
Buhari’s letter read: “Request for the national assembly to raise N850 billion in new external borrowing in the 2020 Appropriation Act in naira from the domestic capital market.
“The Senate may wish to recall that the 2020 Appropriation Act provided for 1,594,986,700,544 of new domestic borrowing and N850 billion of new external borrowing.
“These borrowings were to part finance the 2020 budget deficit of 2,175,197,885,232 only.
“Furthermore, the Senate may wish to note that external borrowing from the international capital market increases Nigeria’s external reserves, provides access to lower costs as well as avoids crowding out private sector borrowers who also wish to access the domestic capital market.
“However, recent developments in the global economic environment as a result of the Coronavirus pandemic and the decline n international oil prices have made it less attractive to borrow from the international capital markets 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 that resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of from the international capital market .
“However, it remains our intention to access the international capital market when conditions improve to refinance this N850 billion of new borrowing and epitomise the benefits inherent in external borrowing.
“Presently, the conditions in the domestic capital market are favourable in terms of availability of funds and relatively low interest rates. This cause of action is deemed prudent given our current realities.
“I have directed the Minister of Finance, Budget and National Planning to make herself available to provide any additional information or clarification which you may require. I trust that this request will be expeditiously considered to accelerate the raising of the N850 billion new borrowing fro the domestic capital market to part finance the 2020 budget deficit as well as to deliver critical programmes and projects to the Nigerian people,” the letter stated.
