Nigerian Senate rejects Buhari's foreign loan plan

2016-11-02 06:00
Muhammadu Buhari. (File: AP)

Muhammadu Buhari. (File: AP)

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

Lagos - Nigeria's Senate on Tuesday rejected President Muhammadu Buhari's plan to take on almost $30bn in external borrowing to fund a record budget spending as the country battles to overcome a recession.

The plan was turned down "due to lack of documents supporting the request", said the Senate in a statement posted on Twitter.

Buhari had last week sent a letter to parliament urging lawmakers to approve his plan to raise $29.6 billion to fund sorely needed infrastructure projects over the next three years.

Nigeria has been trying to diversify its sources of funding to support an economy battered by the plunge of the global price of crude and ongoing rebel attacks on oil infrastructure.

The West African economic heavyweight depends on oil for 70% of its government revenue and the bulk of its foreign exchange.

'There is nothing bad in taking loans'

Buhari's government has been accused of being slow to react to the deepening economic crisis. His government is counting on overseas loans to fund next year's budget.

Financial analysts said the Senate's decision could still be negotiated.

"It's not an outright rejection per se. It's a process that has to continue", Bismarck Rewane of the Lagos-based Financial Derivatives Company, told AFP.

"The president has to go back, make some concessions to the lawmakers on the desirability of the loan," Rewane said.

But Rewane warned that the loans should be spent on projects that would boost productivity, create jobs and tackle poverty.

"There is nothing bad in taking loans particularly in an inflationary period but such loans should not throw the country into another debt trap," Rewane said.

Nigeria, a country of 180 million people, is struggling to emerge from a recession with renewed unrest in the oil-producing Niger delta strangling exports.

In September, the African Development Bank publicly confirmed a planned loan of $4.1 billion over the next two years, Bloomberg News reported.

Read more on:    muhammadu buhari  |  nigeria  |  west africa

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.