Tinubu Gets Senate Approval For $21bn Foreign Loan

The Senate on Tuesday approved President Bola Tinubu’s loan request exceeding $21bn.

The loan is part of the government’s comprehensive external borrowing plan for the 2025–2026 fiscal years.

Senators, during the debate, that led to the approval, argued that the funds are intended for national development projects across key sectors.

They listed infrastructure, security, agriculture and human capital development among others as priority areas.

The approval followed the adoption of a report of the committee on Local and Foreign Debts. The chairman of the committee, Senator Aliyu Wamakko presented the report.

The committee expained that the report had been ready some few weeks, but that it could not be presented owing to multiple public holidays.

It added that the holidays also made it impossible to obtained the relevant documents from the Debt Management Office (DMO) in record time.

The components of the newly approved loans included $21.19 billion in direct foreign loans, €4bn (euros), ¥1bn (Japanese yen), a $65m grant, additional domestic borrowing through government bonds, totaling approximately ₦75bn.

The approval also included capital raising of about $2bn through a foreign-currency-denominated instrument in the domestic market.

Speaking on the development, the Appropriations committee chairman, Senator Olamilekan Solomon Adeola, said that the approval was largely procedural.

According to him, most of the items had already been incorporated into the Medium-Term Expenditure Framework (MTEF) and the 2025 Budget previously passed by the Senate.

“The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” Adeola said.

While defending the borrowing plan, Senate committee chairman on Finance, Sani Musa, said it covered a six-year disbursement period.

He clarified that it’s not just the 2025 fiscal year, emphasising that Nigeria has not defaulted in any of its existing loan obligations.

“There is no economy that grows without borrowing. What we are doing is in line with global best practices,” Senator Musa added.

Also, chairman of the Banking committee, Senator Tokunbo Abiru assured that the loans complied with both the Fiscal Responsibility Act and the Debt Management Act.

He added that all the funds were meant for capital and human development projects.

“These loans are long-term, concessional, and come with favourable repayment terms. Some have tenors ranging from 20 to 35 years,” Abiru noted.

A few other senators, mainly of opposition parties, however expressed concerns over transparency and accountability in the borrowings.

One of the opposition lawmakers, Abdul Ningi, raised questions about the absence of a breakdown of the borrowings, including their details.

“We need to tell our constituents exactly how much is being borrowed in their name, and for what purpose,” Ningi said.

While presenting the request a few weeks ago, President Tinubu had listed critical national infrastructure as areas the borrowing would be committed.

He listed the railways, power plants, digital connectivity, security operations, agriculture and housing projects as some of the critical sectors.

Tinubu Gets Senate Approval For $21bn Foreign Loan is first published on The Whistler Newspaper