Senate set to approve Buhari’s $30bn loan request despite debt concerns

The Senate of the Federal Republic of Nigeria is set to approve the$30 billion loan request by President Mohammed Buhari, despite expressed concerns over the country’s rising debt profile.

The President of the Senate, Dr. Ahmad Lawan, on Monday said with sufficient information supplied by the Federal Government to back its request to borrow $29.9 billion, the Senate would approve the external loan request.

He also said the Production Sharing Contract (PSC) Bill recently signed into law by President Muhammadu Buhari would provide more revenue for the implementation of the 2020 budget.

Highlighting his achievements since he assumed office six months ago, Lawan told reporters in Abuja that unlike what happened in the Eighth Senate, Buhari had provided all information and details required to ensure the passage of the loan request.

Lawan said the Senate would approve the loan based on a critical and prudent assessment of the request.

“Yes, the Ninth Senate will approve the loan request. It is true that the Eighth Senate did not approve the loan request because there was no sufficient information. But this time around, we have been provided better information and details about the loan.

“Though, information has been provided, we shall definitely seek and ensure more explanations, to enable us to take the right decision. In 2016, no detailed information was provided. The executive has learnt its lessons and came up with more information. The Senate will approve the loan request,” the Senate president added.

Lawan’s position yesterday was a clear departure from his position in October when he spoke against borrowing by the federal government to fund infrastructure.

He had at a public hearing on the 2020 budget said: “We cannot continue to borrow to build our infrastructure. I belong to that school that believes that where we can have a PPP to build our infrastructure, we should do that.

“I feel that if we can build our road from Abuja to Kaduna or Kano with private fund and they design a way to collect their money, let us do that. Other countries have done that and it worked. As long as we are not short changed, we have to look at it.”

The president had last month re-presented to the Senate for approval a proposal to borrow $29.96 billion foreign loan to fund some critical projects – but still did not present a detailed draft plan for that loan request – a major reason the Dr. Bukola Saraki-led Eighth National Assembly refused to approve it.

Lawan explained that the availability of more revenue will enhance the smooth implementation of the 2020 budget, as the passage and signing into law of the Production Sharing Contract by the National Assembly would bring in over N420 billion to finance the 2020 budget.

“This law will significantly increase accruals to the government from crude oil contracts. It has also ended our years of inexplicable failure to call in returns due to us from our joint venture partners. As a result of this law, we have expanded a critical revenue stream and ensured more funds will flow into the treasury that will enable the government to execute its budgets and critical developmental projects”, he said.

However, former chairman, Senate Committee on Local and Foreign Debt, Senator Shehu Sani, had explained why the president’s request to borrow the fund was turned down by the Eighth Senate.

“We turned down the federal government loan request for $30 billion to save Nigeria from sinking into the dark gully of a perpetual debt trap. We don’t want our country to be recolonised by creditor banks.

“Our external debt in 2015 was $10.32 billion and it escalated to $22.08 in the second quarter of this year, which is 114 per cent. If we had approved that loan request, our external debt could have catapulted to over $52 Billion and that is not sustainable.”