Senator questions Tinubu’s fresh loan request, use of previous borrowings

Anambra Central senator, Victor Umeh, has questioned the federal government’s handling of previous loans, asking why contractors executing capital projects are still awaiting payment despite repeated borrowing approvals to fund projects.

Join the Premium Times WhatsApp Community For Quick Access To News and Happenings Around You.

Mr Umeh spoke on Channels Television’s Politics Today on Tuesday in response to President Bola Tinubu’s request for approval to borrow $20.52 billion and €1.045 billion.

He said the government has repeatedly framed borrowing as necessary to fund its budgets, yet it has failed to meet some of its financial obligations.

“The truth is that we have approved so much funds to be borrowed in the past, and on each occasion we’ve been told that this borrowing would be able to fund the budgets and these budgets have remained unfunded up till this day,” he said.

Mr Umeh, who represents Anambra Central Senatorial District in the Nigerian Senate, noted that three budgets were running concurrently, while contractors handling capital projects had yet to receive payments.

“So if you borrow to finance a budget and you are not able to finance that budget, where has the money gone to? That is the question on the lips of everybody,” he said.

He also said the latest borrowing request was likely to be approved, arguing that members of the ruling party would outnumber opposition lawmakers.

Stay Ahead with Premium Times

Follow us on Google News and never miss breaking stories, investigations, and in-depth reporting.

After reading the president’s letter on Tuesday, Mr Akpabio referred the request to the Senate Committees on Local and Foreign Debts and Appropriations for further scrutiny. He directed the committees to report back within one week.

The senate is expected to take a decision on the request based on the recommendations of the committees.

But no loan request from the Tinubu administration has been rejected by the senate. All loan requests have had smooth sailing at the senate with minimal scrutiny.

Fresh borrowing

Mr Tinubu’s request for fresh borrowings was contained in a letter read by Senate President Godswill Akpabio during plenary on Tuesday.

The president’s letter sought approval to process external loans worth $20,517,755,901 and €1,045,083,643 under the 2026–2027 Supplementary External Borrowing Plan.

He explained that the funds would finance projects in infrastructure, agriculture, healthcare, education, water supply, security and employment generation, as well as financial management reforms.

According to the president, the projects were selected after technical and economic evaluations and are expected to contribute to the country’s socio-economic development.

He said the borrowing was necessary to address Nigeria’s infrastructure deficit and bridge the funding gap.

Mr Akpabio referred the request to the Senate committees on Local and Foreign Debts and Appropriations for consideration, directing them to report back within one week.

Previous borrowing approvals

The latest request follows other borrowing approvals granted by the National Assembly under the Tinubu administration.

In May, lawmakers approved a $516.3 million loan from Deutsche Bank AG for the construction of the Sokoto–Badagry Superhighway.

READ ALSO: Tinubu transmits bill to Senate to allow transfer of convicted Nigerians abroad back home

The loan has a nine-year tenure, including a grace period of up to three years. Its interest rate is capped at the Secured Overnight Financing Rate plus 5.3 per cent annually. The facility is backed by insurance from the Islamic Corporation of Investment and Export Credit, the insurance arm of the Islamic Development Bank.

In March, the National Assembly approved a $6 billion external borrowing plan. The package included a $5 billion facility from First Abu Dhabi Bank to support the national budget and a $1 billion export finance facility arranged by Citibank for the rehabilitation of Tin Can Island Port and the Lagos Port Complex.

The latest request comes amid concerns over Nigeria’s rising public debt and the cost of servicing government obligations.

The government maintains that borrowing is needed to finance infrastructure and other development projects. But Mr Umeh has questioned whether previous loans have translated into the funding of approved budgets and the payment of contractors.

Share this:

Discover more from Premium Times Nigeria

Subscribe to get the latest posts sent to your email.

Type your email…

Subscribe

CBD COP17: Nigeria urges developed countries to fulfil $30bn annual biodiversity funding pledge

Israel’s parliamentary election too close to call as Netanyahu seeks another term

Emmanuel Agbo

More News

Israel’s parliamentary election too close to call as Netanyahu seeks another term

Benue police rescue 29 kidnap victims, arrest 34 foreigners

TRAVELOGUE: What happened in Vegas!!!

Nigerian govt approves N70,000 monthly transport allowance for workers

‘I have a duty to serve Nigeria, and I will’ — Adesina tells Tinubu

Russia not behind waving of Russian flags during 2024 protests in Nigeria — Lavrov