The Senate has approved President Muhammadu Buhari’s request to borrow the sum of N850 billion from the Nigeria capital market to finance projects in the 2020 budget.
Shortly after approving the loan yesterday, the Senate President, Ahmad Lawan, asked the Committees on Finance and Appropriation to liaise with the finance minister for details on the request.
President Buhari, in his letter to the Senate President, sought for the approval of the Red Chamber to borrow N850 billion from the capital market to ensure adequate funding of projects in the 2020 budget.
The loan, according to him, is to execute “critical projects and programmes for the people of Nigeria.” The president, in the letter, explained that the external borrowing would be made from the domestic capital market instead of the international capital market.
He added that the Minister of Finance, Budget and National Planning, Zainab Ahmed, had been directed to provide more information that may be requested by the upper legislative chamber over the new external borrowing plan.
The letter reads: “Request for the National Assembly to raise N850 billion in new external borrowing in the 2020 Appropriation Act in naira from the domestic capital market.
“The Senate may wish to recall that the 2020 Appropriation Act provided for N1.594trillion of new domestic borrowing and N850 billion of new external borrowing.
“These borrowings were to part finance the 2020 budget deficit of N2.175trillion only.
“Furthermore, the Senate may wish to note that external borrowing from the international capital market increases Nigeria’s external reserves, provides access to lower costs as well as avoids crowding out private sector borrowers who also wish to access the domestic capital market.
“However, recent developments in the global economic environment as a result of the coronavirus pandemic and the decline in international oil prices have made it less attractive to borrow from the international capital markets 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 that resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of from the international capital market.
“However, it remains our intention to access the international capital market when conditions improve to refinance this N850 billion of new borrowing and epitomise the benefits inherent in external borrowing.
“Presently, the conditions in the domestic capital market are favourable in terms of availability of funds and relatively low interest rates. This cause of action is deemed prudent given our current realities.
“I have directed the Minister of Finance, Budget and National Planning to make herself available to provide any additional information or clarification which you may require. I trust that this request will be expeditiously considered to accelerate the raising of the N850 billion new borrowing from the domestic capital market to part finance the 2020 budget deficit as well as to deliver critical programmes and projects to the Nigerian people,” Buhari said.
Meanwhile, Senator Lawan has assured Nigerians that the country would overcome economic challenges facing them as a result of dwindling revenue from crude oil saled.
Lawan stated this in a speech he delivered to welcome the lawmakers back from a five-week recess embarked on by the National Assembly in the wake of outbreak of the novel COVID-19 disease.
According to him, the decision of the upper chamber to reconvene from recess was “to enable us (Senate) to sustain work on solutions and to ensure that the health crisis does not create further problems that might be more difficult to deal with.”
Earlier, Lawan lamented the effect of the pandemic which according to him, had killed thousands of citizens across the world.
“We have also lost many of our dear compatriots. One of them was the chief of staff to the President of the Federal Republic of Nigeria, Mallam Abba Kyari. We condole with President Muhammadu Buhari on this painful loss, just as we mourn other citizens who have died because of the disease,” he said.
At the House of Representatives, the speaker, Hon Femi Gbajabiamila, has insisted that palliatives provided by the federal government must reach all Nigerians in need.
Gbajabiamila said that revealed that in preparing for the new reality the country faces, he had established a COVID-19 Strategic Response Team (CRST) with a broad mandate to develop interventions and reforms and to update the legislative agenda to reflect Nigeria’s post-COVID realities and priorities.
“The Strategic Response Team will be supported by a group of technical experts, private sector leaders and representatives. Their experience and expertise will ensure that the policy proposals presented to the House are rigorously grounded in a fact-based reality,” he stated.
According to him, the House would work on legislation in that regard. “We intend to bring these unique perspectives in our ongoing work to codify the National Social Investment Programmes (NSIP) into a Bill that will be considered by the House at our next adjourned date.
“We will also at that time seek to pass a second Economic Stimulus Bill to provide necessary relief to individuals and corporate organisations in Nigeria. We expect that before then, the Senate will quickly consider and pass the first Economic Stimulus Bill which has since passed in the House and now awaits concurrence by the Senate.”
He said the COVID-19 pandemic has devastated global economy, and that “at a time when the social welfare demands on the public purse are higher than they have ever been, our present reality calls for nothing short of a wholesale reform of our governing structures, systems and processes.
“Any such efforts must of necessity, begin with drastic reductions in the cost of governance coupled with determined efforts to drive economic diversity and innovation in the non-oil sector.”
“There are no longer any sacred cows, protected spaces or classes. Every area of our national health policy, economic policy, tax policy, education policy and security architecture are now on the table for reform.
“We must turn this moment of profound crises into an opportunity to make the hard choices we have too long deferred but can now no longer avoid if we are to survive as a nation. This House of Representatives is ready, and I trust that we will find allies in government and across our country who are prepared to make the changes that our country needs to survive, recover and thrive.”
He equally reechoed calls on the government of the Peoples Republic of China to ensure that Nigerians and people of African descent resident in China receive the human right protections to which all citizens of the world are entitled in view of continuous reports of mistreatment of Nigerians in that country.
“These are the same rights and privileges the people of China receive in foreign lands, including here in Nigeria. Where there are credible cases of discrimination, harassment or rights abuses against our citizens, swift and visible action must be taken by the Chinese authorities to safeguard lives, livelihoods, property and the sense of human dignity of Nigerians and fellow Africans.”
At the plenary, the House passed for second reading a “Bill for an Act to Repeal the Quarantine Act 2004 and enact the Control of Infectious Disease Law, 2020.
The bill which was consequently referred to the Committee of the Whole for consideration was sponsored by Gbajabiamila.