The Senate has approved the $6.1 billion loan request by President Muhammadu Buhari.


The $6.1 billion loan request, which is equivalent to about N2.343 trillion, was approved on Wednesday after the Senate considered the report of the Senate Committee on Local and Foreign Debts.


The Chairman of the committee, Clifford Ordia, presented the report.


Mr Buhari had, in May, asked the National Assembly to approve the loan.


The loan, he said, will be raised from multilateral and bilateral tenders as well as the international capital market.


He also disclosed that the National Assembly already approved the borrowing of N4.6 trillion in the 2021 Appropriation Act. And that the new borrowing of N2.3 trillion will part-finance the deficit in the 2021 budget.


In his presentation, Mr Ordia said the request is not new as it was approved in the borrowing plan when the national assembly passed the 2021 budget.


“What we are about to pass is not a new borrowing, it has been approved in the 2021 budget,” he said.


After the approval, the Senate President, Ahmad Lawan, said the National Assembly must make sure that there are no frivolous expenditures by the executive.


“Let me thank the committee, this is not a new loan. This is a borrowing plan we have approved. What we have done is to provide the necessary resolutions for the implementation of it.


“Every cent counts. Our committees must be alive to oversee it. No frivolous expenditures should be entertained.”


Nigeria’s 2021 budget already has a deficit of N5.6 trillion.


The president had said the loan will be used to fund “projects from priority sectors of the economy namely: Power, Transportation, Agriculture and Rural Development, Education, Health, provision of Counterpart Funding for Multilateral and Bilateral Projects, Defence and Water Resources.”


The approval of the president’s loan request comes amid Nigeria’s growing deficit and debt crisis.


Mr Buhari had, in October, acknowledged the fact that the deficit in the proposed budget was more than the three per cent threshold as established by the Fiscal Responsibility Act, 2007.


He said the measure was necessary due to the “existential challenge of Coronavirus pandemic and its aftermath; I believe that this justifies exceeding the threshold as provided for by this law.”


In April, the National Assembly approved loan requests of $1.5billion and €995million for the Buhari administration.