The Senate on Tuesday gave approval for the federal government to secure two external borrowings totalling $5.5 billion and which will allow the government to pay down the equivalent of $3 billion dollars in domestic debt.
However, the Senate on Tuesday following the adoption of a report by the Senate Committee on Local and Foreign Debts at its plenary approved the loan request.
According to Buhari's letter on October 4, 2017, the external borrowing was captured in the 2017 budget which has a deficit of N2.35 trillion out of which N2.321 trillion is to be borrowed. With the $3bn to be used for refinancing domestic debts, local lenders owed by the federal government may now expect to be paid.
Before the unanimous approval of the loan, some Senators called for caution on the way and manner the Federal Government rushes to take foreign loans. "The balance of the 2017 external borrowing in the sum of $3.2 billion is planned to be partially sourced in the ICM of $2.5 billion through Eurobonds or a combination of Eurobonds and Diaspora bonds, while $700 billion is proposed to be raised from multilateral sources".
"So we are simply refinancing the payment of the debts".
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"The Mambilla hydro-power project which had now been abandoned, when completed, will add substantially to the national grid thus improve the power output of the country".
"The construction of the second runway of the Nnamdi Azikwe International Airport will enhance safety of the air passengers, increase the use of the airport by international airlines thus increase the revenue base of the country".
Senator Gbenga Ashafa, urged that the report be approved in view of its cover of critical infrastructure across the six geopolitical zones. This Senate is known to be working together for the benefit of all Nigerians.
Giving further clarification, Senate leader, Ahmed Lawan noted that part of the bond would be used to offset foreign loans in order to reduce pressure on the nation's foreign reserves.
"Times were when the executive could have spent or collected this loan without recourse to the National Assembly. Mr. President, these are infrastructural projects that will have very positive impacts on the economy".