President Muhammadu
Buhari has asked the national assembly to approve a loan request of N850
billion to fund the 2020 budget.
The president’s
request was contained in a letter read by Senate President Ahmad Lawan on
Tuesday.
Buhari asked that
the loan be raised from the domestic capital market.
According to the
president, borrowing from the international market is unattractive because of
the COVID-19 pandemic and falling oil prices.
“Furthermore the
senate may wish to know that the borrowing from the external capital market
increases Nigeria’s external reserves, provides access to lower cost and as
well as avoids crowding out of private sector borrowers who wish to access the
domestic capital market,” he said.
“However, recent
developments in the global economic environment as a result of the coronavirus
pandemic and the decline in international oil prices has made it less
attractive to borrow from the international market 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 by resolution to raise the
N850 billion of new external borrowing in naira from the domestic capital
market instead of the international capital market.”
The senate approved
the loan after giving it “speedy consideration”, suspending its relevant
orders.
Lawan directed the
committees on finance and appropriations to get more details of the loan
request from the ministry of finance.
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