On Thursday, the Senate granted approval for President Bola Ahmed Tinubu’s request for a fresh loan amounting to $2.2 billion. This decision marks a significant step in the government’s financial strategy as Nigeria grapples with its escalating debt levels.
The approval came after the Senate considered and adopted a report from the committee on local and foreign debts, which is chaired by Senator Aliyu Wamakko from Sokoto North. This committee played a crucial role in evaluating the implications of the proposed loan.
With this new loan, Nigeria’s total debt has now reached an unprecedented high of N136 trillion. This figure underscores the country’s ongoing struggles with fiscal management and economic stability.
In his request, President Tinubu outlined the necessity of this loan in a letter addressed to the National Assembly. He sought the Senate and the House of Representatives’ approval for the external borrowing plan as part of the 2024 Appropriation Act.
Tinubu emphasized that the funds from the loan would be allocated to help cover the budget deficit of N9.7 trillion for the upcoming fiscal year. This deficit poses a significant challenge to the government’s financial planning.
The President’s request was presented during separate sessions in the Senate and the House of Representatives, where it was read by Speaker Tajudeen Abbas and Senate President Godswill Akpabio, respectively. This dual presentation highlighted the urgency of the matter.
Following the reading, the request was referred to the Wamakko-led committee for further legislative examination. The committee was tasked with reporting back to the Senate promptly to facilitate swift action on the approval.
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Earlier, the Federal Executive Council (FEC) had given its endorsement for the $2.2 billion external borrowing plan. This approval was framed as a necessary measure to bolster the nation’s finances and support ongoing economic reforms.
During the committee’s presentation, Wamakko recommended that the Senate approve the loan request. When the matter was put to a voice vote, the Senate, led by President Akpabio, approved the request, reflecting a consensus on the necessity of the funding.
As Nigeria navigates its financial landscape, this loan represents both a challenge and an opportunity. The government aims to utilize these funds effectively to address pressing budgetary needs while also striving for economic recovery.
