President Bola Tinubu has requested the approval of the Senate for an additional $7.8 billion and €100 million borrowing plan, a mere 24 hours after seeking approval for the N2.18 trillion Supplementary budget.
This move comes amid economic challenges exacerbated by low revenue and what has been described as imprudent government spending.
The President’s request was conveyed in a letter read during a plenary session by Senate President, GodsWill Akpabio, on Wednesday. Just a day prior, President Tinubu had presented the N2.18 trillion supplementary budget to the National Assembly.
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A few months ago, the National Assembly approved a total of N819.5 billion presented by the President. This allocation included a N500 billion palliative package to mitigate the impact of recent economic policies.
The President’s letter stated, “The Senate may wish to note that the past administration approved the 2022 – 2024 borrowing plan at the Federal Executive Council which was held on the 15th day of May 2023.”
The borrowing plan encompasses a range of sectors, with a specific focus on infrastructure, agriculture, health, education, water supply, security, employment, and financial management reforms, among others. The total facility for the projects and programs under the borrowing plan amounts to $7,864,508,559 and €100 million.
President Tinubu highlighted that the removal of fuel subsidy and its impact on the economy prompted interest from the African Development Bank and the World Bank Group to assist the country, offering sums of $1 billion and $2 billion respectively.
“The Senate is invited to note that following the removal of fuel subsidy and its impact on the economy in the country, the African Development Bank and the World Bank Group have indicated interest to assist the country in mitigating the economic shores and recent reforms with a sum of $1 billion and $2 billion respectively.
“In addition to the Federal Executive Council approved 2022-2024 external borrowing plan. Consequently, the required approval is 7,864,508,559 dollars, and in terms of euros, 1000 million euros.
“I would like to underscore the fact that the projects and programmes borrowing plans were selected based on positive technical economic evaluations as well as the expected contribution to the social economic development of the country, including employment generation, skills acquisitions, supporting the emergence of more entrepreneurs, poverty reduction and food security to improve the livelihood of an average Nigerian,” he said in the letter.
The president emphasized that the projects were selected based on positive technical economic evaluations and their expected contributions to the socio-economic development of the country, including employment generation, skill acquisition, support for entrepreneurship, poverty reduction, and food security.
He assured that the projects and programs would be implemented across all 36 states of the federation and the Federal Capital Territory, focusing on critical infrastructure projects such as power, railway, and health, among others.
Given the current economic realities facing the country, President Tinubu emphasized the urgency of the Senate’s consideration and approval of the 2022-2024 external borrowing plans to enable the government to fulfill its responsibilities to Nigerians through prompt disbursement and efficient project implementation.
However, the fresh loan request is coming at a time when the federal government’s use of public funds is under serious scrutiny. On Tuesday, it was revealed that the supplementary budget of N2.17 trillion the federal government requested from the National Assembly includes billions of naira budgeted for vehicles.
In the budget allocation, there is an allocation of N2.9 billion for Sport Utility Vehicles (SUVs) for the Presidential Villa. Additionally, another N2.9 billion is set aside for the replacement of operational vehicles for the presidency. Renovation projects for the presidential and vice-presidential residences are also included, with N4 billion allocated for the president’s residence and N2.5 billion for the vice president’s residence.
The State House, which encompasses various aspects of the presidency, is proposed to receive a total of N28 billion, and the Presidential Air Fleet is allocated N12.5 billion for its operations and maintenance.
The budget has faced additional criticism due to the allocation of N5.5 billion for an education loan fund and N5.095 billion for the Nigerian Navy, specifically for the acquisition of a presidential yacht.
These allocations have sparked controversy and raised questions about their prioritization in the budget, especially as the government needs to borrow to fund them.