ABUJA (Reuters) – Nigerian President Muhammadu Buhari has asked parliament to approve $22.72 billion of foreign borrowings tied to infrastructure and other projects, according to a letter seen by Reuters on Friday, after a similar request three years ago was rejected.
Nigeria’s President Muhammadu Buhari.
In the letter dated Nov. 26, Buhari said parliament did not approve a $30 billion external borrowing plan in its entirety. Rather, a $4.5 billion Eurobond sale was approved alongside five projects out of a total of 39.
He asked for the lower house to reconsider and approve the external borrowing plan for 2016-2018 as well as projects tied to the funds, he said in the letter.
The government has said it wanted to borrow more from abroad so that 40% of its loans come from offshore sources by 2019 to lower cost and help fund its record budgets. Buhari plans to spend 10.33 trillion naira ($33.8 billion) next year, a 17% increase over this year’s budget.
The Debt Management Office (DMO) said it had no plans to use the international debt market in 2019 after its sixth Eurobond sale a year earlier. However, the debt office has said the government plans to tap cheap concessionary loans this year.
The new borrowings are tied to projects supported by the World Bank, African Development Bank, Islamic Development Bank, German Development Bank and China EXIMBank, the letter read.
“Outstanding projects in the plan that were not approved by the legislature are … critical to the delivery of the government’s policies and programmes relating to power, mining, roads, agriculture, health, water and educational sectors,” Buhari said in the letter.
In 2016, Buhari asked the Senate to approve $30 billion of foreign borrowing to fund projects. But the Senate dealt him an unexpected blow by rejecting the plan.
During Buhari’s first term, the executive was embroiled in a power tussle with the legislature that slowed government including confirmation of appointments. However, in February, Buhari won a second term while some of his party loyalists in parliament were re-elected.
Nigeria has been borrowing abroad to fund projects after a 2016 recession caused largely by low global oil prices, but debt service costs have been rising.
Reporting by Camillus Eboh in Abuja; Writing by Chijioke Ohuocha; Editing by Matthew Lewis