Nigeria’s President Muhammadu Buhari has written to the National Assembly seeking approval for a foreign loan request of $5.5 billion.
The appeal was made known through a letter read on the floor of Upper Legislative Chamber by the President of the Senate, Senator Bukola Saraki, on Tuesday, October 10.
Contained in the letter are words of the President which affirms that the loan will be obtained through the issuance of Euro and Diaspora bonds and will be used to fund capital projects, including the construction of Mabila power project in Taraba State, construction of the second runway of Abuja Airport and other major projects across the country.
The Presidency also said part of foreign loans will be used to refinance local debts.
The letter reads,
“Accordingly, the Senate is requested to kindly approve the following external borrowings: Issuance of $2.5bn in International Capital Market through Eurobonds or a combination of Eurobonds and Diaspora bonds for the financing of the Federal Government of Nigeria’s 2017 Appropriation Act and capital expenditure
projects in the Act.
“Issuance of Eurobond in the ICM and/or loans syndication by the banks in the sum of $3bn for refinancing of maturing domestic debts obligations of the Federal Government of Nigeria, while looking forward to the timely approval of the National Assembly to enable Nigerians to take advantage of these opportunities for funding.”
Recall President had made a similar move last October, (2016) when he wrote to the National Assembly asking them to approve a foreign loan of $29.960 billion to address infrastructure deficit in the country.
The amount, which was under the government’s External Borrowing Plan, is to be spent on power, railway, roads, education, health, water resources etc.
President Buhari had lamented the “huge infrastructure deficit” experienced in the country and the enormous financial resources required to fill the gap in the face of dwindling resources and the inability of the nation’s annual budgetary provisions to bridge the infrastructure deficit.
He described the borrowing as “prudent” in order to bridge the financial gap.