The Senate yesterday returned from a five-week break to speedily approve the N850 billion local loan request by President Muhammadu Buhari to fund critical capital projects in the 2020 budget after which the lawmakers adjourned indefinitely.
The upper legislative chamber, after rising from a two-hour executive session, considered the loan request contained in a two-page letter dated March 24 from Buhari, and read at plenary by the President of the Senate, Dr. Ahmad Lawan.
The Senate Leader, Senator Yahaya Abdullahi, moved a motion for the suspension of Order 1 of the Senate Rules to allow the Senate to consider the loan request.
He requested that the loan application be granted due to the necessity of the time and the strategic projects to be executed with it.
There was no dissenting voice and the Senate unanimously approved the N850 billion loan request.
Lawan thereafter directed the Minister of Finance, Budget and National Planning to furnish the Senate Committees on Appropriation and Finance with full details and breakdown of the approved loan.
Buhari had sought the approval in the letter entitled: “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.”
In the letter, the president noted that 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 part-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,” he said.
The president said recent developments in the global economic environment as a result of the COVID-19 pandemic and the decline in international oil prices had 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,” he said.
The president, however, explained that it might still access the international capital market when situations improve to refinance the N850 billion of new borrowing and epitomise the benefits inherent in external borrowing.
He explained further that presently, the conditions in the domestic capital market were 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,” Buhari said.
Earlier yesterday, the senate president had lamented the negative impact of the pandemic on the 2020 budget, rallying senators behind the executive to see the country out of the woods.
Welcoming the senators back after a long break, Lawan said: “The pandemic has affected our budget for this year, not just because of falling oil prices, but also because it has forced a reduction in economic activities, leading to an enormous loss of revenue,” he said.
He noted that the Senate leadership had been working with the executive on areas of adjustments for a more realistic implementation, adding that the resumption yesterday would lead to a quicker resolution of some of its decisions.
“The pandemic has unsettled economies, affected the way we relate to each other and disrupted calendars of activities across different sectors,” Lawan said, adding: “Government has responded well under the recommendations of scientists and experts.”
He also appealed to senators to continue to educate Nigerians and their constituents on COVID-19 protocols of social distancing and using of facial masks as one of the ways to prevent the spread of the pandemic.
After the approval of the Senate votes and proceedings for yesterday, the Senate president adjourned plenary sine die.