President Muhammadu Buhari has requested that the National Assembly approve a $5.513 billion loan seemed by the Federal Government.
This was made known in a letter read by Femi Gbajabiamila, Speaker of the House of Representatives, at the plenary session on Thursday.
According to the president’s letter, the loan will be used to finance the 2020 revised budget, expenditure arising from the novel coronavirus (COVID-19) pandemic and priority projects of the government.
The president bthat the assumptions in the 2020 budget are no longer attainable given the slump in oil prices and lower demand for crude oil caused by the COVID-19 pandemic.
The letter, which was also transmitted to the Senate by the Executive, revealed that $1.5 billion will come from the World Bank, $500 million from the African Development Bank (AfDB), $113 million from the Islamic Development Bank and $3.4 billion from the International Monetary Fund (IMF), which the lender earlier approved.
President Buhari also said the loan will be used to provide fiscal support for the states as well as provide an economic stimulus program that will aid state-level efforts “to protect livelihoods, ensure food security and stimulate economic activity”.
“The COVID-19 pandemic has also created the need for additional expenditure in the health sector. All of these have necessitated a review of the 2020 budget and the medium-term expenditure framework,” the letter read.
The president explained that the 2020 revised budget has a higher deficit, and that “in order to finance this deficit, the federal government is planning to raise funds from both domestic and external sources”.
He also presented a revised 2020 Appropriation Bill and 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
He urged both the Senate and House of Representatives to expeditiously approve the proposals due to the urgency of the situation.