President Muhammad Buhari has justified his decision to borrow N850 billion from Domestic Market, saying conditions there are more favourable than in the international market.
Buhari, in a letter dated March 24 to the Senate, said the recent global Coronavirus pandemic and decline in oil price have made it unfavourable to borrow at the international market.
He said in the letter addressed to the President of the Senate and Chairman of the National Assembly: “Recent development in the global economic environment as a result of Coronavirus pandemic and decline in international oil price have made it unattractive to the international market at this time.
“To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget.
“I hereby seek Senate’s approval by resolution to raise N850 billion new external borrowing in Naira from domestic market, instead from international capital market.
“However, it remains our intention to access international capital markets when the global conditions improve, to refinance N850 billion new borrowing and optimize the benefit inherent in external borrowing as presently, the conditions in domestic capital market are favourable in terms of funds and relatively low interest rates, this course of action is deemed prudent given our current reality.”
