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.