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President Muhammadu Buhari has written to the Senate and the House of Representatives, requesting the lawmakers’ approval for a new loan to the tune of $5.513 billion. The letters were separately read today at the resumption of plenary by Senate President, Ahmad Lawan, and Speaker of the House of Representatives, Femi Gbajabiamila.

The president said the loan would be used to finance the 2020 budget deficit, support the funding of priority projects of the federal government and also projects to support the state governments amid the Covid-19 pandemic. The president's request comes four weeks after Nigeria received the International Monetary Fund’s (IMF) approval for emergency financial assistance in the sum of $3.4 billion.  

The Covid-19 pandemic – along with the sharp fall in oil prices – has led to a decline in government's revenue, thereby increasing the fiscal deficits. According to a statement by the House of Representatives on Thursday, the president is "seeking the House approval to borrow locally & internationally to finance capital projects as well as finance projects to support state governors in the 2020 budget. The letter was referred to the House Committee on loans & debt management."

The president's letter also seeks the consideration of both houses of the National Assembly for the approval of the revised 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategic Paper (FSP) and to amend the Appropriation Act 2020.

Early in March, the Senate had approved the president's request for external borrowings totaling $22.7 billion. However, as the global coronavirus outbreak worsened, the federal government said it would suspend its plan to obtain the loans due to the ensuing realities in the global economic landscape.
 
The government subsequently sought to raise $7.05 billion from multilateral institutions, including the International Monetary Fund (IMF), World Bank and African Development Bank (AfDB), as part of its fiscal stimulus package to address the economic impacts of the Covid-19 pandemic. This amount included the $3.4 billion the government has received from the IMF.