Sufuyan Ojeifo And Onwuka Nzeshi
4 December 2008
Abuja — Barely 24 hours after presenting the 2009 Appropriation Bill, President Umaru Musa Yar'Adua has written to the National Assembly, asking it to consider and approve the issuance of naira-denominated Bond in the international capital market in the equivalent of $500 million.
The bond, THISDAY learnt, is meant to raise funds to take care of the anticipated over N1 trillion deficit in the 2009 budget.
But the Senate Committee on Appropriation, under the chairmanship of Senator Iyiola Omisore, has kicked against the country taking foreign loans.
In the four-page letter addressed to Senate President David Mark and Speaker of the House of Representatives Dimeji Bankole, Yar'Adua said the Federal Legislature "may kindly wish to note that in line with my government's objectives, inter alia, of improving the well-being of our people, guaranteeing their security, providing infrastructure as engine of economic growth and creating an enabling environment for private sector participation on the economy, the Federal Government proposes to issue Nigeria's sovereign bond in the International Capital Market (ICM), to establish a sovereign benchmark.
"The benchmark issue of the naira denominated Bond (in the equivalent of US$500 million) will be for a tenor of 10 years."
In the letter dated November 27, 2008, which was read on the floor of the Senate yesterday by Mark, the President said: "In this respect, and in line with the recommendation of the Federal Executive Council, I wish to seek the approval of the Senate for the issue.
"The Distinguished Senate may wish to note the advantages of accessing the ICM include:
But in a letter dated December 2, 2008 by Senator Omisore to the Minister of Finance, entitled: "An Appraisal of Feedback Re: US$500M Naira Denominated Loan," he 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."
He also said evidence had shown that Nigeria did not productively utilize such loans it procured over the three decades, principally due to lack of institutional capacity.
According to him, "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 is tantamount 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."
Be the first to Write a Comment!
Copyright © 2008 This Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
