President Muhammadu Buhari on Tuesday forwarded a request to the Senate requesting approval to borrow the sum of $ 6, 183, 081, 643, 40 (N2, 343, 942, 848. 00) as new external borrowing to finance the 2021 budget.
The request read on the floor of the Upper Chamber by the Senate President, Ahmad Lawan, aims to part-finance the deficit of N5.602trn in the 2021 Appropriation Act.
The new loan according to Buhari would enable government to ensure “employment generation and poverty reduction, as well as protection the most vulnerable and very poor segments of the Nigerian Society.”
The loan is also meant to finance Donor funded and Capital projects under the 2018 – 2020 Federal Government External Borrowing (Rolling) Plan, such as, Power, Transportation, Agriculture and Rural Development, Education and Health.
Others are, Provision of Counterpart Funding for Multilateral and Bilateral projects, Defence and Water Resources.
He added that the funded projects and programmes are based on “positive, technical and economic evaluations as well as contribution they would make to the socio-economic development of the country.”
Insisting that his request is in line with the Debt Management Strategy which seeks to moderate the development of the country, President Buhari disclosed that the loan would cover both federal and state governments’ projects geared towards the realization of the country’s Economic Sustainability Plan.
The loan is to be sourced from international financial institutions such as the World Bank, African Development Bank, French Development Bank, China EXIMBank.
Others are Islamic Development Bank and the International Fund for Agricultural Development (IFAD)
Nigeria’s debt profile according to the Debt N32.9trnManagement Office.
If approved, the debt would increase to N35.24trn.
Buhari had in December 2020 signed the N13.59trn Budget into law with N496.5bn approved for statutory transfer, N3.3trn for debt servicing, N4.1trn for capital expenditure, N5.6trn for recurrent expenditure and N5.2trn for fiscal deficit.