NIGERIAN SENATE RESOLVES THAT APPROVED EXTERNAL BORROWING OF 850BN SHOULD NOW BE RAISED FROM DOMESTIC CAPITAL MARKET
Resolution on Borrowing Plan.
The Senate earlier today amended its earlier resolution on the borrowing plan of the Federal Government of Nigeria, the resolution amending the borrowing plan is as to the source of the N850bn earlier approved by the Senate to be sourced by External Borrowing
The Resolution was predicated on a letter of request signed by the President of Federal Republic of Nigeria, President Muhammadu Buhari where the President requested that the Earlier approved external borrowing of N850bn should be raised in Naira from the Domestic capital market instead of from International Capital market. In the Letter, The President, explained that even though there were benefits from external borrowings which include ‘External Borrowing from the International capital market increases Nigeria’s External reserves, provides access to lower costs and longer tenure funds, as well as avoids crowding out private sector borrowers who also wish to access the Domestic Capital Market.’ The President, however further explains that ‘recent development in the Global Economic environment as a result of the coronavirus pandemic and decline in International oil prices have made it less attractive to borrow from the International Capital Market.’
The Senate therefore considered and approved that the N850bn external borrowing earlier approved should now be raised from the Domestic Capital Market for the funding of the 2020 appropriation act. The Senate further mandated its committees on Appropriations, Finance, Local and Foreign debts and National Planning to interface with the Federal Ministry of Finance and National Planning for further briefings.
It is important to state that the effect of the resolution of the Senate is not to approve fresh loan of N850bn rather it is to allow the earlier approved external borrowing to be sourced from Domestic Capital Market.
COVID-19: Senate Resolves that FG should appropriate 10% of GDP as stimulus package for Critical Identified areas.
The Senate, upon a motion sponsored by the Senate Leader and co-sponsored by all other Senators held an extensive debate on the existing COVID-19 Pandemic and came up with wide ranging resolutions including: commendation of the President Commander in Chief, Muhammadu Buhari for confronting the COVID-19 Pandemic by providing effective leadership and having risen to the occasion when it matters most; commendation of the frontline patriotic health workers for their hard work, diligence and sacrifices including putting their lives and on the line in tackling this Pandemic; Commendation of the PTF, NCDC, Federal Ministry of Health, Hospitals and other Health Institutions (Public and Private) for their steadfastness and dedication in combating the pandemic; and appreciation of the World Health Organization and the International Development Partners, Corporate bodies, Faith based Organizations and individuals for their donations and support towards fighting the Pandemic, Commendation of all Nigerians for keeping safe and following rules of the lockdown.
The Senate also resolved that the executive should fast track the submission of the revised MTF, FSP and 2020 National Budget to the National Assembly for consideration and passage and urge the executive to use this grim period to change the trajectory and structure of the Nigerian economy by appropriating at least 10% of GDP as a stimulus package for investment into: Health and Education infrastructures; Agricultural value chains; Solid mineral value chains; Renewable sources of energy; Petroleum industry value chain; Infrastructure and public works Roads, Railways, Harbours, Power, Waterways etc; Investment on Science, Technology, Innovation and Research Value Chains; Integrating research, science, Technology, and Innovation into Agriculture, Industry and Manufacture.
Senator (Dr.) Ajibola Basiru
Chairman, Senate Committee of Media and Public Affairs