President Bola Ahmed Tinubu’s request to borrow $ 7.8 billion and €100 million as part of the 2022 – 2024 borrowing plan of the Federal Government on Saturday, during plenary, was approved by the Nigerian Senate.
The Informant247 gathered that the request was approved after Senate’s consideration and adoption of its committee reports on Local and Foreign Debt.
It would be recalled that President Tinubu had said that the Federal Executive Council under former President Muhammadu Buhari approved the loan facility on May 15, 2023, to finance infrastructure, health, education, agriculture, insecurity and other sectors, adding that the foreign loan became necessary to bridge the financial gap and return the economic activities of the country to normalcy.
The president said the funds would be used to develop infrastructure, agriculture, health, education, water supply, security and employment, and financial management reforms.
In a related development, the Red Chamber approved President Tinubu’s request to securitise the Central Bank of Nigeria (CBN) N7.3trn Ways and Means advances to the Federal Government.
Tinubu had, in a letter read by the Senate President, said the securitisation aimed to reduce debt service costs and extend the repayment period of the existing loans.
The Ways and Means provision allows the government to borrow from the Central Bank if it requires short-term or emergency financing to support delayed government projected cash receipts of fiscal shortfalls.
The interest rate for the securitised Ways and Means advances has been reduced to 9% per annum, compared to the MPR of 0.3%.
“The savings arising from the much lower interest rate will have to reduce the deficit in the budget,” Tinubu said.