Home Exclusive $7.905bn External Loan: Senate Pick Holes In FG’s Request

$7.905bn External Loan: Senate Pick Holes In FG’s Request

by Our Reporter

The Senate has queried the request of President Goodluck Jonathan for a $7.905bn foreign loan to service Pipeline Projects from 2012 to 2014.

Although the Senators referred the loan request to the committees on local and Foreign Debts and Finances they also directed both committees to get clear details of the projects items.

Moving the debate on the President’s request titled “inclusion of the Pipeline Projects into the Medium Term (2012-2014) external borrowing” the Senate Leader, Sen. Victor Ndoma-Egba, explained that the projects are specific initiatives designed to put the economy back on track through growth and employment activities geared towards transforming the fortunes of Nigerians by the implementation of the governments transformation agenda.

While he stated that the pipeline projects are at various stages of finalisation and that a total external pipeline borrowing in the amount of US $7, 905, 690, 000.00 or US $2.64bn 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 $3billion.

He noted that 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.

Senators who spoke on the request expressed reservations over items on the project stressing that most of them do not merit external loans. Other raised concern over the prevalence of corruption against the background of a long history of failure to utilized borrowed funds appropriately.

Senator Ita Enang, who noted his support for the loan request, expressed concern that 85 percent of the items in the pipeline projects were not worth getting the loans for, advocating that only about 15 percent of the projects merit the loan.

Senator Nkechi Nwaogu described most of the items as intangible. Senator Ayogu Eze, on his part noted that alternative transport system like rail and water ways were not adequately captured in the projects as such, even if loans are borrowed for road rehabilitation, they will be over stretched.

Sen. Ahmed Lawan, who also supported the loan, however warned against lopsided implementation of projects from the loans. He accused the Minister of Aviation of diverting a cargo airplane project menat for the North East to the South-South. Senator James Manager however refuted the claim as wrong.

In a clear opposition to the request, Senator Ben Ayade, stressed that history has shown that most loans borrowed in the past were never used for the purpose intended. He added that with the enormous resources in the country, there was no reason going out to borrow money. “Throwing money at our problems all the time has kept us where we are today. Until we overhaul our internal challenges and deal with our moral problems, mainly corruption we have no business borrowing money. Corruption takes our money. We make huge borrowings and nothing to show for it. I oppose completely to the borrowing” he said.

He disclosed how a project in his constituency was never done in spite of a payment of over N570m which is 57 percent of the contract sum was paid to the contractor.

Senate President however vowed to take up the matter of constituency project.

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