Home Nigeria PDP kicks as Senate okays President Buhari’s bid to borrow N850 billion

PDP kicks as Senate okays President Buhari’s bid to borrow N850 billion


The upper chamber of the Nation­al Assembly on Tuesday approved President Muhammadu Buhari’s request to borrow the sum of N850 billion from the domestic capital market to finance projects in the 2020 budget.

But the Peoples Democratic Party (PDP) has expressed concerns over the hasty approval of the loan.

Shortly after approving the loan request, the President of the Senate, Ahmad Lawan, who presided over the plenary, asked the committees on Finance and Appropriation to liaise with the finance minister to get more details on the loan request.

President Buhari, in his letter to the President of the Senate, sought the approval of the Senate to borrow N850 billion from the domestic capi­tal market to ensure adequate funds to finance projects in the 2020 budget.

The loan, according to the pres­ident, is to execute “critical projects and programmes for the people of Nigeria.”

The president, in the letter, explained that external borrowing would be made from the domestic capital market instead of the international capital market.

He added that the Minis­ter of Finance, Budget and National Planning, Zainab Ahmed, has been directed to provide further information that may be requested by the upper legislative chamber over the new external bor­rowing plan.

The letter reads: “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 in 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 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 from the do­mestic capital market to part finance the 2020 budget defi­cit as well as to deliver critical programmes and projects to the Nigerian people.”

Meanwhile, the upper chamber on Tuesday advised the executive arm of govern­ment on the best way to over­come the COVID-19 pandemic ravaging the nation.

Along this line, the Senate has called on the executive to rejig the implementation strategy and structures for the response of the pandemic.

The Senate added that rejigging the implementa­tion strategy would ensure better coordination between the federal, state, and local governments as well as the private sector, particularly in the detection, isolation, treatment of cases, distribu­tion of palliatives, and other interventions.

The upper chamber decid­ed to give this advice following the impact of the pandemic on the lives of the people and the economy.

It also charged the execu­tive to set up a National Tech­nical Committee on COVID-19 consisting of relevant scien­tists and health professionals at home and abroad.

The Senate said: “The committee should be charged with the responsibility of de­veloping national strategic response to the pandemic, including the detailed epi­demiology of the disease in Nigeria, the development or production of rapid testing kits, effective therapy and prevention mechanism, etc.”

The resolutions of the Senate followed a motion titled, ‘COVID-19 Pandem­ic: Reviewing the National Responses to the Challenges and the Way Forward’, joint­ly sponsored by the Majority Leader, Yahaya Abdullahi (APC, Kebbi North) and the Minority Leader, Enyinnaya Abaribe (PDP, Abia South), and co-sponsored by five other lawmakers.

The Senate further urged the executive to articulate a coherent and coordinated exit strategy from the lockdown through a phased opening of the economic and social spheres of the nation with­out compromising the safety of the citizens and ensuring that there was no increase in the rate of the infection.

The lawmakers also called on the Presidential Task Force (PTF) and state governors to embark on massive mobilisa­tion, education, and enlighten­ment of Nigerians on the reali­ty of the pandemic and means of protecting themselves, their families, and communities from the virus.

The upper legislative cham­ber further urged the executive to fast track the submission of the revised medium term ex­penditure framework, MTEF, fiscal strategy paper, FSP and the 2020 budget to the Nation­al Assembly for consideration and passage.

It specifically advised the presidency to use “this grim period to change the trajec­tory and structure of the Nigerian economy by appro­priating at least 10 percent of the growth domestic product (GDP) as stimulus package for investment” into the key sectors of the economy.

The sectors, as stated, are health and education infra­structure, agriculture, solid minerals, renewable energy, petroleum industry, infra­structure and public works like roads, railways, har­bours, waterways, etc and investment in science and technology.

Again, the Peoples Dem­ocratic Party (PDP) has ex­pressed concerns over the hasty approval of yet another loan of N850 billion for Presi­dent Buhari’s administration.

The party lamented that despite allegations of finan­cial recklessness and lack of accountability that have dogged the administration, the Senate approved the loan.

The PDP, in a statement by its spokesman, Kola Olog­bondiyan, further expressed concern that the Buhari-led administration had, in its alleged incompetence, failed to articulate tangible wealth creation programmes to buoy the economy, despite the huge natural and human resourc­es at its disposal, but relishes only in accumulating loans, without precise repayment plans, thereby pawning the economy as well as the future of the nation.

“Nigerians are alarmed that the Buhari administra­tion’s over dependence on loans is wrecking our econo­my while amassing huge prob­lems for our future generation.

“It is even more worrisome that the loans are not trans­parently managed as most of them are being trailed by al­legations of mismanagement and embezzlement,” the party said.

The PDP holds that instead of constantly resorting to bor­rowing, the Federal Govern­ment should articulate inno­vative ways to create wealth and plug wastes.

“What is expected at a time like this is for the Buhari pres­idency to immediately cut on luxury, slash the number of presidential appointees, cut down huge allowances that gulp billions of naira and maintain a lean budget that will center on health, research and growth of our economy among other critical needs,” the party advised.

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