The approval came following the Senate's consideration and adoption of the report from its committee on Local and Foreign Debt during Saturday's plenary.
Tinubu clarified that the loan facility, approved by the Federal Executive Council under former President Muhammadu Buhari on May 15, 2023, aims to finance health, education, infrastructure, agriculture, insecurity, and various sectors.
The President emphasized the necessity of the foreign loan to bridge financial gaps and restore the country's economic activities to normalcy. The funds are earmarked for the development of infrastructure, agriculture, health, education, water supply, security, employment, and financial management reforms.
Similarly, the Red Chamber also endorsed Tinubu's request to securitize the Central Bank of Nigeria's N7.3 trillion Ways and Means advances to the Federal Government.
Tinubu, in a letter read by the Senate President, conveyed that the securitization aims to reduce debt service costs and extend the repayment period for existing loans.
The Ways and Means provision allows the government to borrow from the Central Bank for short-term or emergency financing to support delayed government projected cash receipts or fiscal shortfalls.
Furthermore, 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.
