Despite Nigeria’s rising debts and dismal economy, the Senate has approved $1.5 billion and €995 million external loan requests by President Muhammadu Buhari.

The senators approved the loans on Wednesday.

The approval was sequel to the consideration of the report of the Senate Committee on Local and Foreign Debts presented by its Chairman, Clifford Ordia (PDP-Edo), during plenary.

In May 2020, Mr Buhari had sent a letter to the Senate seeking its approval for another batch of external loans to enable his regime to finance the 2020 budget deficit, critical projects, and support some of the state governments.

Mr Buhari explained that he would use the loans used to execute priority projects and support state governments in stimulating their economy adversely hit by the COVID-19 pandemic.

In his presentation, Mr Ordia noted that the borrowings were loans with low-interest rates and a reasonable moratorium and payback period.

He pointed out, “No unusual or onerous conditions attached to the terms of the loans and do not in any manner compromise the sustainability of the Nigerian economy or impugn the integrity and independence of Nigeria as a sovereign nation.

“The loan is in the immediate best interest of the Nigerian state and its citizens in dealing with the COVID-19 pandemic in a way that the economy will be positioned for quick recovery and resume growth.

“While Nigeria’s total public debt stock is on the increase, it is still relatively low vis-à-vis the country’s GDP and the increased borrowing requirements is needed to sustain economic recovery.”

The approved loans included the $750 million from the World Bank for states, fiscal transparency, accountability, and sustainability (SFTAS) programme to provide fiscal support to states.

There is also the World Bank’s $750 million for the COVID-19 Action Recovery and economic stimulus programme to support state-level efforts to protect livelihoods, ensure food security and stimulate economic activity (N-CARES).

The country’s debt status has continued to rise following the president’s decision to keep servicing the country’s ballooning budget with loans from foreign countries.

In December 2020, the country’s debt status rose to N32.915 from N32.222 trillion in September.