President Muhammadu Buhari on Tuesday got the full approval of the National Assembly to borrow N850 billion to fund critical projects in the 2020 budget.
This followed the approval by the House of Representatives of the president’s request to raise N850 billion in the New External Borrowing Plan of the Federal Government in the 2020 Appropriations.
Buhari had in a letter to the House last week Tuesday requested the approval of the loan which had already been approved by the Senate on April 28.
The House approved the request after consideration of the report of the committee of the whole. The report submitted by Alhassan Ado-Dogwua, leader of the House, requested the House to “Approve the Request to Raise N850 Billion in the New External Borrowing Plan in the 2020 Appropriations Act in Naira from the Domestic Capital Market”.
Femi Gbajabiamila, speaker of the House of Representatives, had not read the letter in full, but a copy of the same letter sent to the Senate said the 2020 Appropriation Act provided for N1,594,986,700,544 of new domestic borrowing and N850 billion of new external borrowing. These borrowings were to finance the 2020 budget deficit of N2,175,197,885,232 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 in international oil prices have made it less attractive to borrow from the international capital markets at this time,” the letter said.
To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget, the president said he was seeking the Senate’s approval of 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,” Buhari said in the letter to the Senate.
He said he had directed the minister of finance, budget and national planning to make herself available to provide the Senate any additional information or clarification it may require, adding that he looked forward to expeditious consideration of the request to accelerate the raising of the N850 billion new borrowing “to part finance the 2020 budget deficit as well as to deliver critical programmes and projects to the Nigerian people”.
Meanwhile, the House of Representatives on Tuesday mandated its Committees on Power and Privatisation to review the extant laws, regulations, policies, and contractual arrangement guiding the Power Sector Reform.
The Green Chamber also directed the committees to review and investigate activities of the Nigerian Electricity Supply Industry and submit the report within four weeks.
These decisions followed the adoption of a motion of urgent public importance on “Need to Review and Investigate the Nigerian Power Sector”, sponsored by Ifeanyi Momah (APGA Anambra). Presenting the motion, Momah took the House down memory lane of developments in the sector up to the change of name from National Electric Power Authority (NEPA) to Power Holding Company of Nigeria (PHCN), which removed the monopoly of electricity generation, transmission, distribution, and sales from the former NEPA, and eventual privatisation of the sector.
Momah said the House is concerned that despite government regulatory framework, huge expenditure and private sector participation/investment to meet long-term reform objectives which say that deliver quality, reliable and efficient electricity to consumers at reasonable prices, constant supply of adequate electricity is still a challenge in Nigeria.
The Ihiala Federal Constituency representative argued that as an indication of failure to achieve the gains of the power sector reform in Nigeria, the House further notes that there is need to review the Power Sector Reforms.
He said the House is “concerned also that in light of unstable gas and power supply, and due to critical requirement of power as a major catalyst for the industrialisation of Nigeria, job creation, fiscal revenue generation and economic diversification, there is a need to identify the root causes of the continued moribund nature of the Nigerian Electricity Supply Industry (NESI) and recommend a road map for the revitalization of the sector to the House for further legislative actions”.
