Why We Approved Buhari’s $5.5bn Loan Request – Senate President

Senate President, Ahmad Lawan has given reasons why the Senate approved President, Muhammadu Buhari’s loan request of $5.5 billion.

Recall the President wrote the Senate in May, requesting the approval of the loan, to enable the administration fund the revised 2020 budget and execute some critical projects which was eventually approved on the 2nd of June.

Speaking at the weekend, Lawan said the loan was not approved for frivolous reasons but for the betterment of Nigerians.

He said, given the adverse effect of the coronavirus pandemic on the nation’s economy, it was to help save over 20 million jobs in the country and also stop the economy from sliding into depression.

“We are not doing that in a frivolous way. We are very mindful, we are very patriotic on the way and manner we grant or endorse these requests and we are also very meticulous. Our Committees on Foreign and Domestic Loans have gone through all the papers to ensure that there is justification for those loans. And in fact, in the Senate, we didn’t pass all the loan requests,” said Lawan.

“We passed only the request for $5.513b. There was $1.5b request for states. We could not see the justification and we said no. So, it was not everything that was requested that was was granted by the Senate.

“I want to assure Nigerians that we would always be guided by the need for our country to be prudent; by the need for our government to be prudent and efficient in the deployment of resources. And of course in the process, we should also explore other means of funding our projects like the partnership with the private sector. All we need to do is to create the environment for the private sector to participate.

“Well, we have a shortfall of almost $14.2b funding gap for 2020 Budget. And with COVID-19, came so many negative things that have visited adverse outcomes on our people. We didn’t make hay while the sun shone when we had our crude selling for over $140 per barrel in the past.

“We didn’t diversify the economy, we didn’t invest in the real sectors of the economy and most of the resources were frittered. Now, we have come to a point where we have to address the infrastructure gap that we have but the resources are so low. Crude at one point was selling for $10 and $11 per barrel, especially when this COVID-19 thing started around March.

“We have very significant projects that we need to put in place like the Second Niger Bridge, the Mambilla Hydro-Power Project; the East-West Road, Lagos-Ibadan Expressway, Lagos- Kano Rail Line; Port Harcourt-Maiduguri Rail Line and so many other projects that are as well important. But we don’t have the money.

“Tell me, if you don’t have the resources and you still needed these projects because with some of them you can pay back what you owe once they are operational. Would you because you don’t want to obtain the loans, you will say let me abandon these projects. Or, you will say I will take the loans but I will ensure that all the loans I take and every other resource I put on these projects are properly, efficiently and prudently applied and deployed.

“For us in the National Assembly, we are conscious of the fact that this economy, as affected by COVID-19, if it persists, you could lose over 20million jobs in this country. The economy could go into serious recession probably up to -4% or even -5 % of the GDP. So, you need to have the resources to invest so that the economy does not go into recession and also to ensure that people don’t lose their jobs. Therefore, when the Federal Government was able to get concessionary, multilateral or bilateral loans with very favourable conditions of maybe 1%, 10 years or 20 year moratorium, what can you do? You cannot run away from your challenges.”