Nigerian Senate rejects Buhari’s foreign loan plan

Nigeria’s Senate on Tuesday rejected President Muhammadu Buhari’s plan to take on almost $30 billion 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 percent of its government revenue and the bulk of its foreign exchange.
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.