By Emeka Anaeto, Business Editor & Henry Umoru
ABUJA—THE Senate, yesterday, approved an external loan of $5.5 billion to enable the Federal Government finance the 2017 budget and refinance the foreign debts.

This came as the size of Federal Government’s total debt ticked up by 6.0 percent to N20.373 trillion in the third quarter 2017.

The approval by the Senate followed consideration of report of its Committee on Local and Foreign Debts on the said loan, presented by chairman, Senator Shehu Sani (APC, Kaduna Central), during yesterday’s plenary presided over by Deputy Senate President, Senator Ike Ekweremadu.

With the approval, the government is expected to embark on some capital projects provided in the 2017 budget to which the first part of the new loan amounting $2.5 billion would be applied.

The government is also expected to fulfil part of the unwritten agreement with National Assembly for the loan approval, which includes implementation of the constituency projects slated in 2017 budget.

The second part of the newly approved loan, amounting $3.0 billion, will be applied to the refinancing of maturing domestic debt obligations through the issuance of Eurobonds or a loan syndication.

Presenting report of the committee, Shehu Sani (Kaduna-APC), said the projects listed for the loan would stimulate economic development and create direct and indirect jobs for Nigerians, adding that the $2.5 billion will create more borrowing space for the private sector.

Deputy Senate President, Senator Ike Ekweremadu in his remarks, however, urged the Federal Government, through the Debt Management Office, DMO, to ensure that the debt profile of the country was not over bloated.

It would be recalled that President Muhammadu Buhari had on October 10, written to the Senate, asking for the new loan approval.

The four- page letter, addressed to Senate President, Bukola Saraki was entitled, “ Request for the approval of External Loans for: 1. Implementation of the External Borrowing Approved in the 2017 Appropriation Act:    11 External Borrowing to Re- finance maturing domestic debts through the issuance of USD3.00 Billion Eurobond in the International Capital Market or through a loan syndication.”

According to the letter, while $3 billion would be sourced through Euro bond, the remaining $2.5 would come from other sources in the international capital market.