Buhari seeks approval to borrow fresh $5.5bn


.Nigeria now on auction market – PDP


President Muhammadu Buhari is seeking the approval of the House of Representatives to borrow fund to finance capital projects at the federal and state levels in the 2020 budget. The fund is to support state Governors.

This request was disclosed via the official twitter handle of the House of Representatives.

The request for a fresh loan came on the heels of Presidency urging the House of Representatives to speedily pass the 2020-2022 Medium Term Expenditure Framework MTEF and Fiscal Strategy Paper FSP and the revised Appropriation Bill 2020 for the fiscal year.

The president’s loan request letter which indicated that the fund would be sourced locally and internationally was read on the floor of the House of Representatives by the Speaker, Femi Gbajabiamila, during plenary on Thursday, May 28, 2020.

In the letter to the lower chamber, Buhari, is also seeking the approval for the revised 2020-2022 mid-term expenditure framework (MTEF) which became necessary as a result of the crash in crude oil prices and the cut in the production output.

Although the tweet did not contain the total amount of loan that is being requested, reports suggests that the President is seeking approval to borrow the sum of $5.513 billion from external sources to finance 2020 budget deficit and support state governments to meet challenges caused by the coronavirus pandemic.

While calling on the House of Representatives to speedily pass the 2020-2022 Medium Term Expenditure Framework MTEF and Fiscal Strategy Paper FSP and the revised Appropriation Bill 2020 for the fiscal year Buhari specifically said that the House should amend the revised MTEF/FSP 2020-2022 and Appropriation Act 2020 so as to accelerate its implementation.

According to him, it has become necessary to revise the 2020-2022 and amend the 2020 Appropriation Act in view of the decline in prices oil prices and the cut in Nigeria’s crude oil production quota occassioned by the Covid-19 Pandemic.

He informed the lawmakers that the assumptions underlying the 2020 Appropriation Act are no longer sustainable and it is important to adjust expected revenues, considering the widespread disruptions in other economic activities as well as national trade and transportation due to the measures implemented across the world to contain the pandemic.

He further said that it is imperative to reallocate resources in the Appropriation Act ensure effective implementation of the emergency measures and other actions necessary to mitigate socio-economic effects of the Covid-19 pandemic.

Moreover the President has also requested for the approval of 5,513 billions dollars loan from four mulitrateral financial institutions across the globe under the external borrowing plan of the government to finance the budget.

The loan according to him became necessary in view of the sharp decline in crude oil prices at the international market due to the Covid-19 pandemic from the $57 benchmark projected in the budget to $25 current price as well as sharp cut in production quota of crude oil.

The facility he informed is in line with the provisions of sections 21 of the Debt Management Office Act 2003 and 41 of the Fiscal Responsibility Act FRA Act 2007 and would be financed by  the following institutions as follows: International Monetary Fund IMF $400 million,  World Bank. $1.5 billion, African Development Bank $500 bn and Islamic Development Bank $113billion

Meanwhile, the Peoples Democratic Party (PDP)  has raised alarm that with the volume of foreign loans being accumulated by President Muhammadu Buhari and his All Progressives Congress (APC), “our nation and her people have been placed on the international auction market”.

According to its spokesman Kola Ologbondiyan, the PDP  said President Buhari’s moves to take a fresh $5.513 billion (N2.1 trillion) loan in addition to an earlier $22.79 billion (N8.5trillion), the size of 2020 budget, without operable repayment plans, will totally compromise the fiscal integrity of our nation and open her up for economic annexation by foreign creditors. This is in addition to N850 billion from the capital market.

PDP stated: “It is more alarming that the Buhari government, in this fiscal year, cannot muster the capacity to harness the huge resources available in our country to generate even half of the sum of its own budget, but has been going cap in hands to shop for foreign loans.

“The PDP expressed fears that with this situation, the APC administration is practically driving our nation to the brinks while exposing Nigerians to the risk of modern day slavery by mortgaging our future to economic appropriation by foreign interests.

“Already the situation has created apprehensions, anxiety and trepidation among the citizens, particularly the youths, who are now scared about their future and the survival of our nation under the APC.

“It is even more distressing that this administration cannot account for the loans it has taken so far.  In spite of the deluge of loans, the lives of the ordinary Nigerians, on whose behalf they claim to be amassing these debts, have become worse than the APC and Buhari met them in 2015.

“Painfully, even the savings made by previous administrations have been opened up for pillaging by APC leaders and the cabal in the Buhari Presidency

“The PDP called on Nigerians to look beyond our primordial differences and unite in speaking against this accumulation of debts. It is no longerabout political party affiliations, creed, ethnicity, class or age. We all must unite in one voice to save our nation from an imminent collapse.

“Our party holds that rather than mortgaging our nation to foreign interests, President Buhari should immediately cut the size of his government, slash its over bloated budget, clip its luxuries, curb unbridled corruption in his administration and make haste to recover the N14 trillion that was stolen by APC leaders under his watch.

“If the N14 trillion stashed away by APC leaders and the cabal is recovered, our nation will not be in need of these humongous foreign loans.

“The PDP also urges the National Assembly to stand on the side of the people and save the nation by immediately using its legislative instrument to check this unbridled appetite for foreign loans”.

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