The Nigeria’s $30 Billion Loan Request

The Nigeria’s $30 Billion Loan Request

The 9th senate has begun the approval process for the $30 billion loan request made by President Buhari. The senate president referred the request to the Committee on Local and Foreign Loans at the plenary.

Lawan gave the Committee two weeks to work on the loan request and report back to the senate.

Buhari had on November 28, resent the $29.96 billion 2016-2018 external borrowing plan to the senate for consideration and approval. The borrowing plan was a bone of contention between the executive and the 8th Senate led by Dr. Bukola Saraki. The 8th senate has rejected it, citing irregularities and lack of programmes to justify the loan.

Speaking to journalists on Monday in Abuja, Lawan said that the senate will approve the loan but will also make sure that it is judiciously used to implement infrastructural programmes that will benefit the Nigerian people.

“The question of whether we will pass or approve the loan request of the executive arm of government, yes, we will pass it. If we don’t have money and you have projects to build them, how will you provide infrastructure that you need?

“But one thing is that, we are going to be critical that every cent that is borrowed is tied to a project. These are projects that will have spillover effects on the economy and we will undertake our oversight so well to ensure that such funds are properly, prudently, economically and transparently applied on those projects,” he said.

When he was reminded that the loan plan was rejected in 2016, which questions the morality behind its approval now, the Senate President said.

“In 2016, there was no submission of details. This time, I think the executive has learnt its lesson and the letter came with sufficient details. Nothing will really militate against the passage of the loan request.”

As justified as the loan may appear this time, it is coming at a time when the International Monetary Fund (IMF) and economic experts are warning Nigeria against her rising debts. The debt management office said the total external debt stands at $27.16 billion, $4.27 billion out of it is for states and the Federal Capital Territory (FCT).

This warning was also acknowledged by Lawan himself back in October 23, at the opening session of a two-day public hearing organized by the National Assembly on the 2020 Federal Budget held in Abuja. He warned that the Federal Government’s habit of borrowing is hurting the already fragile economy of the country, and recommended a public-private partnership as an alternative to external borrowing to fund infrastructure.

“We cannot continue to borrow to build our infrastructure; I belong to that school of thought that believes that, where we can have a PPP (Public Private Partnership) to build our infrastructure, we should do that.

“I feel that we can build our road from Abuja to Kaduna or to Kano with private fund and they design a way to collect their money, let us do that. Other countries have done that and it worked. As long as we are not shortchanged, we have to look at it, if we have to borrow, where there is another opportunity we should explore that.”

This was the Senate President’s take on external borrowing, just about two months ago. So it was surprising that despite his preachment of PPP in funding infrastructure, he approved the $29.96 billion loan request from the president without hesitation.

Could there be a quid pro quo?

The suspicion of quid pro quo was stirred by the announcement that Buhari has approved N37 billion for the renovation of the National Assembly complex. The N37 billion, although it found its way into the 2020 budget, was not inclusive of the N128 billion allocated for the National Assembly next year. The money instead is part of the 2020 Federal Capital Development Administration budget.

The National Assembly Complex was built in 1999 at the cost of N7 billion.

Speaking about the renovation of the National Assembly and its funding, Lawan said: “We met the president and it was related to the condition of the complex. The president responded and said he was going to renovate the complex. N37 billion was sourced and was given. It was put under the FCT, not national assembly. All we require is to have the complex renovated.”

The $29.96 billion loan approval by the senate and the N37 billion national assembly complex renovation fund approval by President Buhari are all happening at a time when Nigerians are pointing out that the 2020 National Budget was padded by N264 billion, justified by fraudulent projects. So it is believed to be a “give and take deal” between the executive and the National Assembly.

Premiums Times reported how the budget has been inflated through frivolous self-enrichment projects.

President Buhari has assented to the budget not minding the frivolous figures inserted by lawmakers, and the approval of the requested loan will put the nation’s debt profile at $97 billion (N30 trillion), a huge sum that the future generation will live to pay. The major concern expressed by Nigerians so far is that there may be little or nothing to justify the staggering figures of the debt.

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