The Senate has approved the Federal Government’s request for conversion of N850bn new external borrowing in the 2020 budget to domestic borrowing. A statement released by the Debt Management Office on Tuesday said the House of Representatives was also expected to approve the request. The DMO is to issue FGN Securities in the domestic market to raise the N850bn once the request is approved by the House.
The 2020 Appropriation Act had approved a total of N1,594.99bn as new borrowing to part-finance the deficit in the budget. The new borrowing comprises N794.99bn domestic borrowing and N850bn external borrowing. The DMO explained that the impact of the COVID-19 pandemic on the world economy and the international capital market had forced the Federal Government to reappraise its borrowing plans.
Consequently, the government decided that it would be more expedient to raise the N850bn, earlier approved as external borrowing, from domestic sources. The statement said, “This conversion from external to domestic is to ensure that the implementation of the 2020 Appropriation Act is not jeopardised by lack of funds. “Thus, the N850bn is not new or incremental borrowing. Rather, it is an amendment of the source of borrowing from external to domestic.”
Meanwhile, the Peoples Democratic Party has expressed concerns over what it called the hasty approval of the loan request by the regime of the President, Major-General Muhammadu Buhari (retd.) The PDP National Publicity Secretary, Mr. Kola Ologbondiyan, in a statement further said the party was concerned that the Buhari-led regime had allegedly failed to articulate tangible wealth creation programmes to buoy the nation’s economy. According to him, the Buhari regime relishes only in accumulating loans without precise repayment plans.