Sufuyan Ojeifo
26 June 2009
Abuja — The Senate has given President Umaru Musa Yar'Adua the go-ahead to give a US$10 million soft loan to the Democratic Republic of Sao Tome and Principe.
The approval came amid complaints by Senators that Nigeria, which is giving out the loan, is bogged down by infrastructure decay, which needs to be addressed through massive injection of funds.
But the loan, according to a letter to the Senate dated May 5, 2009 and read on the floor on May 13 would be sourced from the president's contingency vote.
Sao Tome and Principe had originally requested for US$30 million loan. Yar'Adua, acting on the decision of the Federal Executive Council (FEC), had decided to part with US$10 million only after assessing the loan request on the basis of prevailing security cosiderations.
He had subsequently forwarded the letter to that effect to the National Assembly. According to the president's letter, the interest-free loan with a maximum six-year repayment period was to be paid back from the Production Sharing Contract(PSC) in respect of the Joint Development Zone (JDZ) oil concessions in which there were revenues from signature bonuses, sales of seismic data, taxes and so on.
He had argued further that "by the nature of the request, especially the emergency that the Sao Tome and Principe faces and considering the relationship between Nigeria and the country, the soft loan would be interest-free, while the loan would be repaid within four to six years"
But before the Upper House unanimously approved the president's request for approval of US$10 million to the country, many senators had sought clarifications in the loan conditions.
Chairman of the Senate Committee on Finance, Senator Ahmed Makarfi (PDP, Kaduna North), who presented his committee report on the loan request, said that the US$30 million loan was to be disbursed to Sao Tome and Principe in three tranches of US$10 million each.
He said Prime Minister Patrice Emery Travoada of the Sao Tome and Principe Republic had made a request for US$30 soft loan in March 2008, to assist his government address some socio-economic difficulties in the country.
He said, "acceding to the request will further enhance the leadership status of Nigeria on the continent of Africa. It should also be noted that the country has a track record of prompt payment as was evidenced in the case of a similar loan of US$15 million granted to it between 2002 and 2004 which was fully repaid according to the terms of the loan in April 2007."
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