While the terms and conditions of the intended credits remain undisclosed, the Senate, Wednesday, approved the sum of $16 billion, €1 billion and a grant of $125 million as foreign loans to Nigeria.
While requesting President Buhari to forward to the National Assembly the terms and conditions of the loans, the Senate approved the issuance of €500 million from the Bank of Industry and €750 million Eurobond in the International Capital Market.
With this approval, nearly all of the revenue of the Federal Government of Nigeria will be ploughed into debt servicing, causing the Federal Government to have recourse to foreign loans to pay its bills, and thereby further increasing the nation’s external debt profile.
The Federal Government had in July 2021, disclosed that it spent N1.8 trillion on debt servicing in the first five months of the year, representing about 98 per cent of the total revenue generated in the same period.
A total of N4.86 trillion was spent by the Federal Government between January and May 2021. While recurrent expenditure in the review period stood at N3.67 trillion, debt service was N1.8 trillion.
The Senate, yesterday gave approval following the consideration of the report of its Committee on Local and Foreign Debts, chaired by Senator Clifford Ordia.
While presenting the report of the Senate Committee on Local and Foreign Debts, the chairman of the committee, Senator Ordia said the projects, which funds are requested for in the 2018-2020 borrowing plan, are ongoing.
“The projects will stimulate a rebirth of commercial and engineering activities and the consequent tax revenues payable to government as a result of these productive activities will increase,” Ordia said.
Speaking on the terms and conditions attached to the loan request. The Deputy Senate President, Ovie Omo-Agege said: “We went through the terms but there were some allegations that they were written in Chinese language and at that time it became clear even from the responses given by those who were in charge in the Budget Office; but they threw it back at us that we gave approval.”