The Debt Management Office (DMO) has said that the alleged fresh N850 billion loan that was sent to the Senate by President Muhammadu Buhari on Tuesday is not new but is part of the N1.59 trillion borrowing that was approved in the 2020 Appropriation Act.
According to the Debt Office, the president sent a readjustment letter to the senate to covert it from an external source of borrowing as initially signed in the 2020 budget to domestic.
“With the Covid-19 pandemic and its attendant effect on the world economy and international capital market, the Federal Government reappraised its borrowing plans and decided that it would be more expedient to raise the N850 billion, earlier approved as external borrowing, from a domestic source, “DMO said in a document dated April 28 2020.
The DMO added that the conversion from external to domestic was to ensure that the implementation of the 2020 budget Appropriation Act is not jeopardized by lack of funds.
According to the DG of the dent office, Patience Oniha, Nigeria’s 2020 budget was approved with a new borrowing of N1.59 trillion to part-finance the country’s total budget deficit at 1.52 percent of estimated gross domestic product of about N4 trillion.
“This was made of N794.99 billion domestic borrowing and N850 billion external borrowing,” DMO said.
According to the statement by the debt office, Buhari’s approval letter to the Senate and House of Representatives to convert the source of raising the N850 billion from external to domestic is in compliance with the law.
“The Senate approved the request on Tuesday, April 28, 2020, while the approval of the House of Representatives is expected,” DMO, said adding that upon approval it will issue FGN Securities in the domestic market to raise the N850 billion.
