The Senate on Tuesday approved $5.513 billion loan requested by President Muhammadu Buhari to finance the revised budget of 2020
Buhari had last week requested for $5.513 billion loan to finance the 2020 Budget.
The Senate after consideration of report of Senate Committee on Foreign loans and Debt, chaired by Senator Clifford A. Ordia, gave approval for the loan.
Ordia, in a report presented before the Senate, which was approved, said: “The revenue projections contained in the Appropriation Act of 2020 has been adversely impacted by revenue shortfalls due to the global COVID-19 pandemic.
“The Committee observed that it has led to dwindling Government revenue from oil sales as well as a sharp drop in global oil prices to below $20 at some point.
“The Committee notes that the pandemic has led to the need for emergency health expenditure and palliatives in order to contain the pandemic, mitigate its effect on citizens and also to prepare for a post-pandemic era.
“The Committee notes that as a consequence, the Federal Government found it expedient to seek for amendment to the Appropriation Act of 2020 as well as review the 2020-2022 Medium Term Expenditure Framework.
“The Committee notes that it is in this regard that the Appropriation Act (Amendment) Bill 2020 together with the Revised Medium Term Expenditure Framework is before the Senate for consideration and passage.
“The Committee notes that the Appropriation Act (Amendment) Bill 2020 contains a revised total budget of N10.594 trillion with a deficit of N4.563 trillion, which will be part-financed by proposed Domestic Borrowing of N2.188 trillion and External Borrowing of N1.984 trillion.
“The Committee notes that the first component of the request of Mr. President is to seek the approval of the Senate to embark on the External borrowing of the sum of $5,513,000,000 to ensure the financing of the revised 2020 Budget deficit.
“The Committee notes that this budget deficit request of Mr. President is aimed at bridging the revenue shortfalls for the 2020 fiscal year and to access immediate funds required to deal expeditiously and decisively with the ravaging impact of the COVID-19 pandemic.
“The Committee observed that this approval will immediately provide the much needed liquidity in order to finance deficit that will be approved in the revised Appropriation (Amendment) Act of 2020 and enable Government to implement and pursue some key priority activities toward curtailment of the COVID-19 Pandemic.
“In view of the above, the Committee, based on clarification and information provided by the Minister of Finance, Budget and National Planning, decided to accelerate the consideration for approval, the sum of $5,513,000,000, being first component of the request in respect of the funding of the Budget deficit proposed for 2020 fiscal year.
“The Committee, in agreement with the attending MDAs, concluded that in the present circumstances of absence of required details, it will resume and conclude the consideration of the other two outstanding components of Mr. President’s External Borrowing request relating to Funding of Priority Projects of the Federal Government to be captured in the Budget estimates for 2021 and Facilities to support States Government to face the challenges of the COVID-19 Pandemic.
“The Committee notes that the request for funding the external borrowing component of the proposed 2020 fiscal year deficit are as follows:
“That the Senate do approve the total sum of $5.513,000,000.00 (Five Billion, Five Hundred and Thirteen Million, United States Dollars) only to finance the proposed Revised 2020 Budget.”