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You are here:Home>>Strategic Research & Analysis>>Nigeria Big borrowing: Jonathan seeks Assembly’s nod for N1.3tr loan
Wednesday, 15 February 2012 14:07

Nigeria Big borrowing: Jonathan seeks Assembly’s nod for N1.3tr loan

Written by John-Abba-Ogbodo and Bridget Chiedu Onochie, Abuja
President Jonathan President Jonathan

Senate claims ‘strange’ N1tr in 2012 budget

NIGERIA’S debt profile is set to rise by N1 trillion. President Goodluck Jonathan, who says he is in dire need of funds to execute some critical projects, wants the National Assembly to clear the coast for him to borrow N1.3 trillion from the World Bank, African Development Bank (ADB) and others.


The President in a letter he wrote to the Legislature yesterday, urged it to endorse his bid to borrow N1trillion (about $7,905,690,000) for the execution of the projects. There were also concerns in the Upper House yesterday that the 2012 budget was not properly packaged by the Executive arm of government.


The country’s external and domestic debts as at September 2011 are put at N6.189 trillion. The domestic debt is N5.3 trillion while the external stock is $5.6 billion. The Federal Government owes $3.316 billion while the 36 states of the federation owe $2.317 billion, bringing the total external debt owed by the two tiers of government to $5.633 billion.


If the Legislature approves the N1.3 trillion being sought by the President, Nigeria’s debt stock will rise to N7.489 trillion.


The Senate Committee on Appropriation, which is scrutinising the budget, alleged that Ministries, Departments and Agencies (MDAs) had smuggled N1trillion into the document.


In a statement, the panel’s chairman, Mohammed Maccido, said the MDAs smuggled the funds for various projects and that made the budget presented to the lawmakers different from the one sent by the President to the National Assembly.


Curiously, the alleged figure is the amount Jonathan wants clearance from the National Assembly to borrow.


Also yesterday, the Senate faulted the calls by some prominent Nigerians for the convocation of a Sovereign National Conference (SNC).


In a communication to the Senate and the House of Representatives, the President explained that the fund would be used for Pipeline Projects for the Medium Term (2012-2014) as outlined in the 2012-2014 External Borrowing Plan.


Jonathan further said the plan was designed to create jobs for Nigerians and grow the economy.


The letter read in part: “I wish to inform you that a number of special initiatives were designed to put the economy back on track through growth and employment activities geared towards the implementation of the Transformation Agenda.


“The Pipeline Projects are at various stages of completion. Therefore, I present herewith a total external pipeline borrowing in the amount of $7,690,000 or $2.64 billion a year being cumulative facilities offered by the World Bank, African Development Bank (ADB), Islamic Development Bank, Exim Bank of China and Indian Lines of Credit.”


The President urged the National Assembly to note that the objectives of the projects conformed with the Transformation Agenda of his administration and cut across various sectors of the economy, adding that the initiatives were meant to put the economy on track through growth and employment.


The Senate, which formally reacted to the calls by some Nigerians for a sovereign conference to discuss the state of the nation, declared that the summit was unnecessary.


At a press conference, Chairman of Senate Committee on Information, Media and Publicity, Enyinnaya Abaribe, said individuals, who have suggestions on the matter could forward them to the National Assembly, stressing that it is the Legislature that is constitutionally allowed to decide such issues on behalf of Nigerians.


“We were elected to represent the people of Nigeria. We don’t think there is any matter under the sun that the Senate will shy away from. I don’t know why they insist on having a Sovereign National Conference. We are not against any group meeting to discuss any issue in Nigeria, that is the essence of democracy but we cannot have democracy without democrats. But if we want to change the constitution, there is the National Assembly. All that is required is for them to bring their suggestions through their representatives and it will receive attention.


“Any Nigerian can send any bill or his opinion on anything about the country. If we have anything, we will say is off limit, it is the unity of Nigeria.”


On the plan by the Federal Executive Council (FEC) to borrow from foreign financial outfits, Abaribe said it had nothing to do with Nigeria being broke. He said the issue would be debated and the position of the Senate made public.


Meanwhile, Senate President David Mark has advised the Upper House standing committees to take the budgets of the ministries under them to the Appropriation Committee for final action, noting that ‘’Thursday (tomorrow) is the deadline and any committee that fails to do so will have itself to blame because such ministries will not have funds for 2012.”


But Maccido, who insisted that the MDAs overloaded the budget, said:  “The problem is that we are seeing projects that are not in the original version of the budget presented to us by the President and substantial part of these projects are being smuggled into the budget by the MDAs and ministers. Over 40 per cent of the projects in their budgets are not in the original budget. And we are saying no to the items so smuggled into the budget, which are over N1 trillion. So, we are right now comparing the budget as originally presented by the President and the version presented by the MDAs. Unless these projects are there in the original budget, we are going to scrap them. It’s no longer going to be business as usual. These people are just smuggling in projects that are not in the budgets. And we are going to remove them,‘’ he said.


Source: The Guardian






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