Nigeria: Buhari Seeks National Assembly Approval to Borrow Another $4bn, €710m Loan

14 September 2021

With the current $1 to N550 exchange rate, the new loan of $4 billion will amount to about N2.2 trillion.

President Muhammadu Buhari is seeking the approval of the National Assembly to borrow another $4 billion ($4,054,476,863) and €710 million loan from bilateral and multilateral organisations to fund the deficit in the 2021 budget.

The president, in a letter to the Senate, said the loan request is an addendum to the 2018-2020 borrowing plan.

He also asked the lawmakers to approve grant components of $125 million.

His request was contained in a letter read out by Senate President Ahmad Lawan, at the start of plenary on Tuesday.

Mr Buhari also explained that the need to borrow more funds is to meet "emerging needs" of some "critical projects."

"I write on the above subject and submit the attached addendum to the proposed 2018-2020 external rolling borrowing plan for the consideration and concurrent approval of the senate for the same to become effective.

"The distinguished senate president may recall that u submitted a request on 2018-2020 borrowing plan for the approval of the senate in May 2021.

"However, in view of other emerging needs and to ensure that all critical projects approved by FEC as of June 2021 are incorporated, I hereby forward an addendum to the proposed borrowing plan.

"The projects listed in the external borrowing plan are to be financed through sovereign loans from the World Bank, French Development Agency, EXIM Bank and IFAD in the total sum of $4,054,476,863 and €710 million and grant components of $125 million," part of the letter read.

The president said the loans, when obtained, will stimulate the economy and create job employment.

His recent loan request comes barely two months after the National Assembly approved his earlier request to borrow $8.3 billion and €490 million loans contained in the initial 2018-2020 borrowing plan.

The lawmakers had said the needed funds were meant for projects geared towards the realisation of the Nigerian Economic Sustainability Plan that cut across key sectors such as infrastructure, health, agriculture and food security, energy, COVID-19, among others.

With the current $1 to N550 exchange rate, the new loan of $4 billion will amount to about N2.2 trillion.

Already, the 2021 budget has a deficit of N5.6 trillion.

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