By Doris Ferdinand
The Presidency has requested for the house of Representatives’ approval to proceed with her intended borrowing of the sum of N2.343 Trillion (USD6,183 Billion).
In a letter to the Speaker of the House, Rep. Femi Gbajabiala on Tuesday, the presidency stated that the requested sum is to part-finance the Budget Deficit of N5.602 trillion.
Excerpt from the letter States this;
“This request is in line with the provisions of Sections 21(1) and 27(1) of the Debt Management Office (Establishment, Etc.) Act, 2003 (DMO Act).
“Section 21(1) of the DMO states that “no external loan shall be approved or obtained by the Minister unless its terms and conditions shall have been laid before the National Assembly and approved by its resolution”,
“While Section 27(1) states that “the National Assembly may by a resolution approve, from time to time, standard terms and conditions for the negotiation and acceptance of external loans and issuance of guarantees”.
Recall that the 2021 Appropriation Act provides for N4,686,775,885,696.00 as New Borrowings (item No. 328) to part-finance the 2021 Fiscal Deficit, Of Which 50% or N2,343,387,942,848.00 (about USD 6,183,081 ,643.40 at the Budget Exchange Rate of USD1.00/N379) is specified as New External Borrowing.
The allocation of N142.343 trillion to New External Borrowing in the 2021 Appropriation Act is consistent with the Nigeria’s Debt Management Strategy, which seeks amongst other objectives, to moderate ‘debt service costs by accessing relatively cheaper external funds, and to free-up space in the domestic market for other borrowers.
