The Nigerian President has sought the National Assembly's approval of a plan to seek $5.5 billion foreign loan.

President Buhari's request was read on the flood of the Senate by Senator Bukola Saraki on Tuesday during plenary.

The request, which President Buhari said was in line with the section 21(1) and 27(1) of the Debt Management office Establishment Act, will enable the government borrow the $5.5 billion from external sources. 

In the breakdown, the executive is seeking $2.5 billion issuance in the International Capital Market (ICM) through Euro Bonds or a combination of Euro Bonds and Diaspora Bonds.

Another $3 billion issuance in Euro Bonds in the ICM and or loans indications from the banks.

President Buhari said that the $2.5 billion loan would be used for the financing of the deficit in the 2017 Appropriation Act and Capital Expenditure Projects in the Act.

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The second $3 billion would  be used for financing of maturing domestic debt obligation of the Federal Government. More like borrowing to pay debts.

The president also highlighted that domestic debts were not long term and were higher than external debt in terms of the cost.

"It will continue to expose the nation to risk of high debt service to revenue ratio, limiting the ability of the government to execute capital projects and other priority expenditure," the document read.

On the details of the proposed borrowing plan, President Buhari said that, "being market based transactions, terms and conditions of the proposed external borrowings can only be determine at the point of issuance or finalisation, based on prevailing market conditions".

Another document was attached to the letter which indicated further terms and conditions. 


He also stressed that the approval of his request would enable Nigeria take advantage of the opportunities that such loans offered. 

His assurance was that the Ministry of Finance, the Debt Management Office and the Federal Government appoint transaction parties for the proposed external borrowing will work together to secure the best terms and conditions.

The National Assembly is required to give approval to such external borrowing, as detailed by the 2017 Appropriation Act and Capital Expenditure Projects in the Act.