Nigeria’s senate rejects plan for external borrowing
Nigeria’s senate has rejected a plan by the administration of President Muhammadu Buhari to borrow billions of dollars in foreign loans.
The senate said in a statement posted on Twitter on Tuesday that the plan to take on $29.6 billion in external borrowing lacked “documents supporting the request.”
Buhari had urged members of the parliament in a letter last week to approve the request to enable his administration to fund infrastructure projects over the next three years.
Nigeria has been struggling to find new resources to finance its projects and services as the country of 180 million continues to suffer from a global slump in oil prices. Foreign creditors, including the African Development Bank, have publicly confirmed plans for lending billions of dollars in loan over the next years.
A renewed unrest in the oil-producing Niger delta has further battered Nigeria’s economy, which was once a heavyweight in West Africa. The country, which normally depends on oil for 70 percent of its government revenue and the bulk of its foreign exchange, has seen recurrent attacks by militants on its oil infrastructure over the past months.
The Nigerian government has also been financing a large-scale military offensive against the Boko Haram Takfiri terrorists group in the north. The group has intensified attacks in the recent past, prompting fears that Abuja would need more resources to reach its objective of overcoming the insurgency.
Observers say Buhari could still win the parliamentary approval on external borrowing if he makes some concessions to the lawmakers on the desirability of the loan. They say the senate rejection on Tuesday was not outright and the negotiations between the government and the parliament could continue.
Buhari has yet to submit a detailed plan on the projects that would absorb the foreign loans. Some lawmakers have voiced concern that the money could end up in projects that has almost no effect on productivity, job creation and poverty fight.
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