The Senate has granted approval to President Tinubu’s request to borrow $7.8 billion and €100 million, constituting a portion of the Federal Government’s 2022–2024 borrowing plan.

The request was approved after the Senate considered and adopted the report of its committee on Local and Foreign Debt during Saturday’s plenary.

Tinubu had said that the Federal Executive Council under former President Muhammadu Buhari approved the loan facility on May 15, 2023 to finance infrastructure, health, education, agriculture, insecurity and other sectors.

He further explained that the foreign loan became necessary to bridge the financial gap and return the economic activities of the country to normalcy.

The funds, he said, would be used to develop infrastructure, agriculture, health, education, water supply, security and employment as well as financial management reforms.

Similarly, the Red Chamber approved Tinubu’s request to securitise the Central Bank of Nigeria (CBN) N7.3trn Ways and Means advances to the Federal Government.

Tinubu had, in a letter read by the Senate President, said the securitisation aimed to reduce debt service cost and extend the repayment period of the existing loans.

The Ways and Means provision allows the government to borrow from the Central Bank in the event that it requires short-term or emergency financing to support delayed government projected cash receipts of fiscal shortfalls.

The interest rate for the securitized Ways and Means advances has been reduced to 9% per annum, compared to the MPR of 0.3%.

“The savings arising from the much lower interest rate will have to reduce the deficit in the budget,” Tinubu said.