Daily Independent (Lagos)
3 December 2008
President Umaru Yar'Adua has requested the approval of the National Assembly to issue Naira denominated bond worth $500 million in the international capital market (ICM) to establish a sovereign benchmark.
However, it emerged on Wednesday that Senators are against the idea, despite the argument by Aso Rock that proceeds from the bond, which will be for a tenor of 10 years, will be used to part-fund the 2009 budget.
Lawmakers in the Lower House got a head start on the budget debate on Wednesday, a day after it was presented by Yar'Adua, while Senators have fixed December 19 to pass it.
Yar'Adua's plan for the bond is contained in a letter he wrote to House of Representatives Speaker, Dimeji Bankole, which was read out at plenary on Wednesday by Deputy Speaker, Usman Nafada.
He said issuing the bond would help improve the well being of Nigerians, guarantee infrastructure as the engine of economic growth, and create the enabling environment for the private sector to flourish.
He also argued that it would:
* Serve as a benchmark for subsequent issues by the Federal Government, sub-national governments and, more importantly the private sector;
* Complement significantly, efforts to project Nigeria internationally as one of the strong emerging economies in the world.
*Create more awareness about Nigeria in the international investor community, particularly fund managers, to provide a strong investor base for capital issues coming out of Nigeria, from either the public or private sector.
But the Senate is opposed to the plan, as noted in a letter its Appropriation Committee Chairman, Iyiola Omisore, wrote on December 2 to Finance Minister, Shamsuddeen Usman. The letter said: "Nigerians are becoming concerned that the country is inadvertently going back to the era of unbridled consummation of external loans, a practice for which the nation and her citizenry had suffered severely in the past.
"Further, evidence has shown that Nigeria did not productively utilise such loans it procured over the past three decades, principally due to lack of institutional capacity.
"In addition, research has shown that no developing country can ever attain the feat achieved by the current developed nations by relying perpetually on external loans, but through trade promotion, and substantial foreign exchange earnings.
"Perhaps of utmost importance is the fact that consummation of external loans tantamounts to signing a treaty with a foreign nation or institution. In a truly representative political system, such treaty must not be entered into until it has been approved by the national Parliament, typified by National Assembly (NASS) in our own case.
"Available evidence showed that the NASS had not been brought into the process as required by the Constitution, over the years, even after the re-emergence of non-military rule in Nigeria in 1999."
It was resolved in the Senate that the fiscal year should now run from January to December.
Senate Spokesman, Ayogu Eze, recounted to reporters how the Senate met behind closed doors on Wednesday) to discuss a number of issues, including the strategy for ensuring that starting from this budget season that we stick to our vow to make sure that the budget year runs from January to December every year and to that effect, the Senate took a decision today that we are going to pass the 2009 Budget before we go on recess.
"Our recess will start formally on December 19, so we want to say that all things being equal, barring any unforeseen difficulties that on or before 19th of December, we will do everything within our power to pass the 2009 budget.
The Senate commended Yar'Adua over sectoral allocations, expressing satisfaction with the figures for power and the Niger Delta.
"We also reviewed the issues in the budget and the aims of that budget and we are very satisfied that the executive branch has finally started addressing some of the issues that we believe are very cardinal for government to deliver on providing welfare support for our people.
"I believe that with what Mr. President has done with this year's budget we are going to see a new dawn because voting over N70 billion, nearly N80 billion to the power sector is an indication that the Executive Branch is now very serious about ensuring that we have uninterrupted power supply in this country because even the projection for economic growth cannot be attained where power supply is epileptic.
"All industries, all human activities depend on stable power supply and of course, the road infrastructure is also receiving enough attention.
"Over N50 billion is going to the Niger Delta region, we hope that that will open up that region and ensure that we have some stability in that area."
By Festus Owete, Otei Oham, Chesa Chesa and Adetutu Folasade-Koyi (Abuja)
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