SENATORS at plenary on Wednesday questioned the
Federal Government’s 2012-2015 Medium Term External Borrowing Plan of $7.905bn,
about N1.23tn.
President Goodluck Jonathan had sent in the
request since February this year and it was meant to finance pipeline projects,
youth employment and power infrastructure in the country.
During the debate, senators were generally
sceptical of government plans to borrow from the foreign financial
institutions, warning that the loan, if approved, should be properly monitored
and used strictly for the specific projects it is meant for.
Leading the debate, Senate Leader, Victor
Ndoma-Egba, said the specific projects were special initiatives designed to put
the economy back on track through growth and employment activities geared
towards transforming the fortunes of citizens.
He said, “The pipeline projects are at various
stages of finalisation and a total external pipeline borrowing on the amount of
US$7,905,960,000 or US$2.4bn a year being cumulative facilities offered are as
follows for the completion of the pipeline projects: World Bank, $2.975bn;
African Development Bank, $731.23m; Islamic Development Bank, $672.85m; French
Development Agency, $56.61m and Exim Bank of China, $3bn.
“The objectives of the projects cut across the
various sectors of the economy and that the projects to be funded and the
amount of loan and terms and condition of the loan and the objectives of each
facility are as set out in the annexure.”
Senator Ahmed Lawan questioned the rationale for
borrowing the huge sum, when not much had come out of what was borrowed in the
past.
He noted that previous borrowing plan had not
been adhered to, adding that there was no guarantee that the present borrowing
plan would yield any result.
Speaking in the same vein, Prof. Ben Ayade,
argued that there was no need borrowing money when the country could look
inwards and generate funds for executing its projects.
He said, “We should not go borrowing. Because
when we do that we lose the value of the naira, we lose our own values. There
is no reason why we should go and borrow from countries that are not as rich as
Nigeria.”
He noted that N570m was earmarked for a water
project in Cross River State and while 75 per cent had been paid to a
contractor, there was nothing on the ground to show that the project existed.
On the allegation, President of the Senate, David
Mark, said he would follow up and ask the Committee on Water Resources to
investigate the matter.
Senator Joshua Dariye warned that the loans could
actually be a “death trap” for the future of Nigerians, adding that there were
a number of items that should be further scrutinised.
Also, Senator Ita Enang, said a careful reading
of the items showed that only 15 per cent of the loan request would be
necessary.
“Some of the projects are unreasonable. I used
the word advisedly. Some of the projects are being done with the national
budget,” he said.
Senator Kabiru Gaya, in his comments noted that
given that the interest rates were very high, the utilisation of the loans
should be monitored effectively.
While supporting the loan request, Senator Issah
Galaudu, said the nation had low savings rate and there was a need to import
capital.
He said the information available to him showed
that 64 per cent of the loans taken between 1970 and 2005 failed because of
corruption and poor monitoring.
He noted that only 2 per cent of the loans were
successful, while 9 per cent were possibly fraudulent.
According Galaudu, an effective monitoring of the
loan applications would avert the mistakes of the past, adding that the
relevant committee should look into the provision of the Fiscal Responsibility
Act to determine the limit of the loans to be taken by the government.
Deputy Senate President Ike Ekweremadu called for
expeditious approval of the loan request, saying that it was critical for the
development of the country, but he added that the Senate should ensure
monitoring of its utilisation.
Details of the borrowing plan show, among
others, that from the IDA financing, the Federal Government is seeking
$250 m (about N39bn) for youth employment and social support operations; $450m
(N70bn) for erosion watershed management projects; another $140m (N22bn), for
growth and employment projects; electricity and gas improvement will get $100m
(N15.5bn); and state health programme, 50m (N8bn).
Meanwhile, a human rights activist in the north,
Shehu Sani, on Wednesday asked the National Assembly to stop the finance
minister, Dr. Ngozi Okonjo-Iweala, from procuring the $7.9bn external
loan, saying any external debt now would plunge the nation into further debt.
The Punch
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