Mr Buhari in May last year requested Senate's approval of the loans to enable the government finance the 2020 budget deficit, critical projects and support some states of the federation.
The Senate on Tuesday approved $1.5 billion and €995 million external loan requests of the president.
The approval was sequel to the consideration of the report of the Senate Committee Local and Foreign Debts presented by its chairman, Clifford Odia (PDP, Edo Central).
President Muhamadu Buhari had in May 2020, sent a letter to the Senate seeking its approval for another batch of external loans to enable the administration finance the 2020 budget deficit, 'critical projects', and support some states of the federation.
The federal government said "the loans will be used to execute priority projects and support state governments in stimulating their economy, adversely hit by the COVID-19 pandemic".
In his presentation, Mr Ordia noted that the borrowings are largely concessional loans with low interest rates and a reasonable moratorium and payback period.
"No unusual or onerous conditions attached and the terms of the loans and do not in any manner, compromise the sustainability of the Nigerian economy or impugn the integrity and independence of Nigeria as a sovereign nation," he said.
"The loan is in the immediate best interest of the Nigerian State and its citizens in dealing with the COVID-19 pandemic in a way that the economy will be positioned for quick recovery and resume growth.
"While Nigeria's Total Public Debt Stock is on the increase, it is still relatively low vis-a-vis the country's GDP and the increased borrowing requirements is needed to sustain the economic recovery."
The approved loans are as follows:
- $750 million from the World Bank for States, Fiscal Transparency, Accountability and Sustainability (SFTAS) programme to provide fiscal support to states.
- World Bank's $750 million for the COVID-19 Action Recovery and economic stimulus programme to support state level efforts to protect livelihoods, ensure food security and stimulate economic activity (N-CARES).
- €671 million, €324 million and €995 million from the Export-Import Bank of Brazil (BNDES) & Deutsche Bank of Germany for the Green Imperative to enhance mechanisation of Agriculture and agro progressing in Nigeria (GIP).
This brings the total approved loans to $1,500,000,000 and €995,000,000.
The panel added that the financing for the GIP, additional financing for SFTAS and CARES are being sourced from Multilateral and Bilateral Global Lenders - and partners with proven track record of previous financial accommodation and support to Nigeria.
Experts have expressed worry as Nigeria's debt profile continues to rise over the years.
Besides borrowing to fund the budget and 'boost' the economy, the country plans to sell some national assets to raise funds. Nigeria is also considering borrowing money from dormant bank accounts and retirement savings as well even as it tightens its tax revenue streams.