President Muhammadu Buhari has sent a letter to the Senate requesting to borrow over $4 billion from external lenders to fund infrastructure development.

The President sent the letter to the Senate on Tuesday citing that European banks including Credit Suisse group and Standard Chartered Bank as private lenders, according to Reuters.

The report revealed that loans range from a grant of $125 million to a 710 million Euros loan will be sourced from the World Bank, French Development Agency, China-Exim Bank and International Fund for Agricultural Development.

Reading the letter at the start of plenary, Senate President, Ahmad Lawan quoted the President stating:

“I write on the above subject and submit the attached addendum to the proposed 2018-2020 external rolling borrowing plan for the consideration and concurrent approval of the senate for the same to become effective,”

“The distinguished senate president may recall that u submitted a request on 2018-2020 borrowing plan for the approval of the senate in May 2021.

“However, in view of other emerging needs and to ensure that all critical projects approved by FEC as of June 2021 are incorporated, I hereby forward an addendum to the proposed borrowing plan.

“The projects listed in the external borrowing plan are to be financed through sovereign loans from the World Bank, French Development Agency, EXIM Bank and IFAD in the total sum of $4,054,476,863 and €710 million and grant components of $125 million.”

Buhari stressed the need to borrow citing that the fund is to be used to meet emerging needs related to funding of crucial projects, create jobs for Nigerians and stimulate the economy.

What you should know

Recall Nairametrics reported in June that according to numbers issued by the Debt Management Office (DMO), Nigeria’s overall debt stock increased by N191 billion in the first quarter of this year, representing a 0.58% increase from N32.916 trillion as of December 31, 2020. The debt stock increased to N33.107 trillion by the end of March 2021,
In June, Senate President, Ahmed Lawan stated that the borrowing plan by the Federal Government is a necessary burden to fund the growth of infrastructure in Nigeria.
Last Month, the FG picked JP Morgan, Citigroup, Standard Chartered and Goldman Sachs as international bookrunners on the $6.2 billion Eurobond issue.