The Senate on Thursday approved President Muhammadu Buhari’s request for external loans of $8,325,526,537 and €490,000,000 (Euros) from international lenders including China Exim Bank and the World Bank.
More than half of the borrowing will come from China Exim Bank and Industrial Commercial Bank of China according to the Senate Committee on Local and Foreign Debt on the 2018-2020 External Borrowing (Rolling) Plan.
The Chairman of the Committee, Senator Clifford Ordia, listed the funding agencies to include:
- China Exim Bank – $2,901,026,509;
- Industrial Commercial Bank of China – $2,484,555,304;
- World Bank – $796,000,000;
- African Development Bank – $104,200,000;
- Africa Growing Together Fund – $20,000,000;
- European ECA/KfW/IPEX/AFC – $1,959,744,724; and
- International Fund For Agricultural Development (IFAD) – $60,000,000.
- French Development Agency – €240,000,000;
- European Investment Bank – €250,000,000;
Ordia said the Committee is aware of the genuine and very serious concerns of Nigerians about the level, sustainability and serviceability of the country’s borrowings in the last decade.
He said that Nigeria’s “debt service figures constitute a huge drain on our revenue to the extent that it accounts for over 30 percent of our expenditure in the annual budget.”
He added that due to the shortfall in the country’s annual revenues “we have had to pass deficit budget every year, requiring us to borrow to finance the deficit in our budget.”
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Ordia noted that out of the total borrowing request of $36,837,281,256 was re-submitted the president with a sum of $26,154,536,533 is for funds proposed to be borrowed from various financial institutions in China.
He said the projects for external borrowings that have been spent in the past are mostly ongoing in transportation, FCT, Aviation, Works & Housing, Agriculture and Water Resources and some Commissions such as National Universities Commission, North East Development Commission and the National Identity Management Commission
Last week Senate approved external borrowing of about $6.2 billion through the issuance of a Eurobond to fund the 2021 budget deficit.
Ifunanya Ikueze is an Engineer, Safety Professional, Writer, Investor, Entrepreneur and Educator.