Senate President Ahmed Lawan: Loan will have positive influence on GDP
The Senate on Thursday approved President Muhammadu Buhari’s plan to borrow $22.79 billion from external creditors to finance infrastructure projects.
The legislators gave their nod to the government during proceedings today in Abuja, to seek the funding expected from the Islamic Development Bank, the African Development Bank, the World Bank and creditors in China, Japan and Germany.
However, he said the Senate would strictly monitor the application of the loan to the various projects for which the loan request was made by the executive arm of government.
The Senate President Ahmed Lawan, said “the loans will have a positive influence on the GDP of this country.”
The government will use the money to expand the railways, build a new hydro power dam and fund special intervention projects across the country, according to a letter sent to the parliament in November.
Senate Minority Leader Enyinnaya Abaribe (PDP, Abia South), reminded his colleagues of a popular saying which says that “he who goes about borrowing, going about sorrowing.”
While the country’s outstanding loans amount to about a quarter of its economic output, Africa’s largest oil producer spends more than half of its revenue servicing debts.
The International Monetary Fund has warned that without major revenue reforms, the debts could rise to almost 36% of GDP by 2024, with interest payments taking as much as 75% of government revenue.