After receiving a letter from President Muhammadu Buhari, the Senate in June approved the $5.513 billion loan request of the president.
The approval followed the consideration of the report of the Senate Committee Local and Foreign Debts presented by its chairman, Clifford Odia (PDP, Edo).
President Buhari had sent a letter to the Senate seeking its approval for another batch of external loans to enable the administration fund the revised 2020 budget and execute some critical projects.
However, due to the sketchy details, the Senate withheld its approval until the lawmakers were better informed.
The federal government proposed to use the loans to execute its priority projects and to support state governments in stimulating their economy, which has been adversely hit by the coronavirus pandemic.
In his presentation, Mr Ordia noted that the emergence of COVID-19 has altered the plans and projections of the government as captured in the 2020 budget.
“Such impact has affected the revenue generation plan of the government, leaving it with a larger deficit than envisaged,” he said.
This change in revenue projection and the deficit it is bringing in the implementation of the budget, the lawmaker explained, necessitated the request for more borrowing to finance the budget.
The Senate also on Tuesday approved the Medium Term Expenditure Framework and Fiscal Strategy Paper projections, upon which the revised 2020 budget would be based.