The Senate said obtaining the loan will strengthen the nation’s foreign reserve.
The Senate on Thursday granted President Bola Tinubu permission to obtain a $2.209bn external loan.
The loan was approved after considering the report of the Senate Committee on Local and Foreign Debts, presented by its Chairman, Aliyu Wamakko, during plenary.
The loan, which is equivalent to N1.767 trillion, would be part of the funds that will be used to finance the N28.7 trillion 2024 budget as incorporated in the Appropriation Act.
It will be sourced from the country’s Eurobonds in international capital markets and gains from financial laws of the country.
A Eurobond is a debt instrument that is denominated in a currency other than the home currency of the country or market in which it is issued. Eurobonds are important because they help countries or organisations raise capital while having the flexibility to issue them in another currency.
President Tinubu requested the approval on Tuesday in accordance with the provisions of Sections 21 (1) and 27 (1) of the Debt Management Office and the approval of the Federal Executive Council.
While presenting the report, Mr Wamakko (APC, Sokoto North) said if the external borrowing request is approved, it will strengthen the nation’s foreign reserve.
He said members of the National Assembly will collaborate with the Federal Ministry of Finance to ensure that the fund is appropriately utilised when it is finally sourced.
He, therefore, recommended approval of the president’s request.
The request was not debated by senators before the Deputy Senate President, Barau Jibrin, who presided over the plenary, approved it.
Mr Jibrin explained that the president’s request is straightforward and that there is no need for an extensive debate.
He also said the external borrowing request was in the interest of the country.
Me Jibrin then appreciated the committee members for the recommendations.
