The Senate, on Thursday, said it has approved foreign loans of about $28 billion for the President Muhammadu Buhari-led administration in the last one year.
Senate President Ahmad Lawan disclosed this in his speech to commemorate the first anniversary of the 9th National Assembly.
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He said the shortfalls of oil revenue had forced the government to resort to foreign borrowing from bilateral and multilateral sources to fund the budget.
Lawan said, “Today, the Senate has passed the request of the Executive on the Revised Budget 2020. The review of the Budget 2020 is largely due to the adverse impact of COVID-19 Pandemic on our revenues.
“As an oil dependent economy, the slump in the price of crude in the world market means that the revenues we earn cannot meet the planned expenditure.
“The low revenues from crude exports also means that there is need to explore other sources of funding the Budget, hence the resort to foreign borrowing from bilateral and multilateral sources.
“In order to support and enable the government raise the necessary funds for national development, there were requests for approval to borrow, both from the domestic and foreign sources.
“We have approved foreign loans of about $28 billion in the last one year. We had ensured proper scrutiny for the desired projects and programmes of government, the conditions of the facilities; before approving such borrowing requests.
“The task ahead of us is to ensure tracking, monitoring and supervision of how the loans are applied. We must ensure that the target projects remain, and that there is value for money also.
“The current experience of low revenues to government, also challenges us to think and evolve new or additional sources of funding government projects, especially, for the development of our infrastructure.
“While borrowing may be inevitable, we should also consider a Public Private Partnership (PPP) as a means of funding some of the government projects.
“The COVID-19 Pandemic has revealed how weak our health infrastructure is. The pandemic has also brought with it a new reality in our lives and livelihoods.
“We are clearly exposed to economic vagaries and instability largely due to our dependence on crude exports. This dependence leaves our country vulnerable to the vicissitudes of the international oil market price.
“We therefore have to confront the challenge of diversifying our economy for more reliable revenues and stable economy.
“With a funding gap of over $14billion, the post COVID-19 period can face a recession and job losses by millions of our citizens.
“There is an urgency more than ever to explore more sources of revenues in addition to the crude. The diversification of our economy must remain a top priority in the subsequent years, from today.”
