The Senate has greenlit President Tinubu’s plea to secure a substantial sum of $7.8 billion and €100 million as part of the Federal Government’s comprehensive borrowing plan spanning 2022 to 2024.
The approval materialized following the Senate’s thorough consideration and adoption of the report presented by its committee on Local and Foreign Debt during a Saturday plenary session.
President Tinubu clarified that the loan, sanctioned by the Federal Executive Council under former President Muhammadu Buhari on May 15, 2023, is earmarked for bolstering critical sectors such as infrastructure, health, education, agriculture, and addressing the pressing issue of insecurity.
Emphasizing the necessity of foreign borrowing, Tinubu highlighted its pivotal role in bridging financial gaps and restoring the country’s economic activities to a state of normalcy.
The allocated funds are slated for diverse purposes, including the development of infrastructure, agriculture, health, education, water supply, security, and employment, along with comprehensive financial management reforms.
Simultaneously, the Senate also granted approval for President Tinubu’s proposal to securitize the Central Bank of Nigeria’s (CBN) substantial N7.3 trillion Ways and Means advances to the Federal Government.
In a letter read by the Senate President, Tinubu outlined that the securitization initiative aims to curtail debt service costs and extend the repayment period for existing loans.
The Ways and Means provision, allowing the government to borrow from the Central Bank for short-term or emergency financing, has been a crucial tool.
Tinubu disclosed that the interest rate for the securitized Ways and Means advances has been reduced to 9% per annum, a notable reduction compared to the Monetary Policy Rate (MPR) of 0.3%. He emphasized that the resultant savings from this interest rate reduction would contribute to reducing the budget deficit.
