Nigeria senate approves president's $22.7bn loan request
Mar 06, 2020
The move comes with Africa's largest oil producer nervously eyeing the impact of the global coronavirus outbreak on its revenues as crude prices have fallen.
POLITICS
Nigeria's upper legislature approved a controversial $22.7 billion foreign loan request by President Muhammadu Buhari on Thursday to revamp the country's crumbling infrastructure.
Nigeria's upper legislature approved a controversial $22.7 billion foreign loan request by President Muhammadu Buhari on Thursday to revamp the country's crumbling infrastructure.
The move comes with Africa's largest oil producer nervously eyeing the impact of the global coronavirus outbreak on its revenues as crude prices have fallen.
The request for the loan approval drew fierce opposition from some lawmakers who have voiced concerns about the weight of debt servicing and demanded the government provide details of the specific projects to be funded.
Nigeria's government expects that the loan will be funded from the World Bank, the Islamic Development Bank, China's Eximbank, the African Development Bank, and lenders in Germany and Japan.
Senate president Ahmad Lawan, from Buhari's ruling All Progressives Congress party, said the funds "would be spent on projects that would have impact on the lives of Nigerians".
"We must ensure that no single dollar or cent is spent on any other thing outside of what has been indicated here and we pray that this loan will turn around the economy of Nigeria," he said.
Nigeria is facing growing debt costs as it has turned to overseas lenders to fund key projects following a recession in 2016.
The continent's largest economy has struggled to bolster growth after emerging from the downturn some three years ago and the IMF last month downgraded its growth forecast for 2020 to 2 percent.
Nigeria's budget is set on crude prices being at least $57 per barrel for it to fund government spending.
Finance Minister Zainab Ahmed on Wednesday said the government was "concerned by the current drop in oil price because it's now below our budget".
She said officials would conduct "a mid-term review" in the coming months and adjust the budget if revenues continue to suffer.
Ministers from the OPEC group of oil-producing countries, including Nigeria, on Thursday, recommended a drastic production cut of 1.5 million barrels per day to stabilise oil prices which have dropped to $47 a barrel.