Nigerian House Grants Buhari’s Loan Request!
Nigeria’s budget projection for 2020 is certainly not going to come as expected especially with lockdown measures adopted by many states to help limit the spread of the coronavirus. While these lockdown measures might have been effective in reducing the incidence of coronavirus infection in Nigeria, it has on the other hand disrupted economic growth.
Also with the sudden crash in global oil prices, the expectation of Nigeria to generate large revenue through crude oil has seriously hit the rocks. This explains why Nigeria’s president has approached the House of Assembly to get acceptance for a loan of over N800 billion.
In the past couple of weeks, news reports from several media channels reported that Nigerian vessels conveying thousands of metric tons of crude oil were roaming around the high sea without a success in finding a potential buyer.
The Approval for the Credit Request
The assent for the loan was affected after the President of the Senate read a letter from President Buhari, expressing his interest in securing a credit request from the domestic capital market.
The Punch Newspaper reported that the House of Representatives approved the facility request amidst plenty of controversy although the president secured the acceptance on Tuesday, May 12, 2020, in less than 10 minutes.
The Vanguard Newspapers also confirmed that the senate gave a go ahead for Nigeria’s request to raise N850 billion from the domestic capital market on Tuesday, May 12, 2020.
The hallowed chamber however ordered its committees on Finance, Appropriation, Domestic and Foreign Debt and National Planning to collaborate with the Minister of Finance, Zainab Ahmed, in order to equip itself with other useful details regarding the request for the loan.
Also, The Daily Trust reported that the House of Representatives had received the loan request following the receipt of a report of its committee headed by Hassan Ado Dogwa which granted the assent of the request earlier forwarded to the House by President Buhari.
The committee made a recommendation that the House gave an approval for the request of N850 billion in the new external borrowing plan in the 2020 Appropriations Act in Naira from the Domestic Capital Market.
In a letter emerging from the President, the N850 billion loan was to be raised from the domestic capital market with the aim of helping to finance critical projects in the 2020 budget.
In a similar development, The Daily Post stated that the President, in a letter to the House on Tuesday, requested for N850 billion which had already been considered in the 2020 appropriation act to be changed from external borrowing to domestic debt.
The newspaper also stated that upon consideration, the House Committee on Supply led by the committee headed by the leader of the House, Hassan Ado Dogwa granted the loan request for the facility.
This Day Newspaper corroborated the consent for loan by reporting that the House of Representatives at the resumption of plenary on Tuesday okayed the request by President Muhammadu Buhari to generate N850 billion through the domestic capital market to support projects in the 2020 budget.
The Senate recently put its standing rules on hold and gave swift approval for the loan during plenary.
Speaking on the report, Alhassan Ado explained that the loan was rather to convert an existing request from foreign sources into local sources.
He asserted the item was already had a special provision in the 2020 Act and that all they desired was to source the facility locally. During the leadership interface with the Finance Minister, it was guaranteed that the rate of interest for the loan would be fair.
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