8 November 2012

Nigeria: Senators to Jonathan - You're Leading Nation Into Debt Trap

Senators yesterday criticised President Goodluck Jonathan for seeking $7.9 billion external loan to finance certain projects, saying he was leading Nigeria into a debt trap.

Jonathan in February sought the inclusion of the projects into the Medium Term (2012-2014) External Borrowing Plan.

Debating a motion on the matter presented by Senate Leader Victor Ndoma-Egba, senators said the borrowing would expose the nation to a debt trap.

Senator Benedict Anyade (PDP, Cross River) said there was no basis for seeking fresh external loans when most of the projects for which huge funds were borrowed in the past were abandoned.

He said resorting to foreign loans is a celebration of the inefficiency and lack of moral credibility.

Senator Ita Solomon Enang (PDP, Akwa Ibom North-East) said most of the items for which loans were being sought were unreasonable because they had already been provided for in the 2013 budget.

Senator Ganiyu Olanrewaju Solomon (ACN, Lagos East) said the previous loans acquired from foreign institutions had not been used for the purposes intended, suggesting that the implementation of loans be monitored in order not to make the borrowing a burden on the coming generation.

Deputy Senate President Ike Ekweremadu said instead of being particular about the borrowing loans for the projects, Jonathan must focus on the utilisation of the borrowed funds.

According to him, the US is the most indebted nation but it has been able to achieve results by utilising its funds well. "What is important in borrowing is the utilization," Ekweremadu said.

Senator Ahmed Lawan (ANPP, Yobe North) wondered why Jonathan was insisting on fresh external loans when the ones previously obtained had not been equitably distributed.

Lawan also flayed the administration for failing to adhere to the previous external borrowing plan.

In the same vein, the Chairman of the Senate Committee on States and Local Government Administration, Senator Kabiru Gaya (ANPP, Kano South) said he could not understand why the Federal Government was seeking an external loan of N244bn for the eradication of illiteracy in just three states.

According to the borrowing plan submitted to the Senate, a copy of which was obtained by our correspondent, the president is planning to borrow $2.98 billion from the World Bank for such projects as growth and employment project ($140m), state health programme investment credit ($50m), electricity and gas improvement ($150m), erosion watershed management ($450m), polio eradication (95m), state education programme investment ($150m), food and waste management ($200m), among others.

He is also planning to borrow $3 billion from the Exim Bank of China for Abuja light rail project ($500m), Zungeru hydroelectric power project ($765.7m), infrastructure projects ($1.6bn) and national information and communication technology infrastructural backbone project ($100m).

Expected from the Islamic Development Bank is a loan of $672.8m for projects like bilingual education programme ($70m), Zungeru hydroelectric power project ($234m), Gashua water supply ($40m), upgrading of hospital facilities in Kaduna State (44.69m), science secondary schools in Kaduna ($17.32m), among others.

From the African Development Bank, Jonathan wants to borrow $731.2m for Zaria regional water supply ($81.2m), development of FCT satellite towns ($300m), water resources and sanitation projects ($200m), among other projects.

He also wants to borrow $56.61m from the French Development Agency for one single project on national urban water sector reforms.

When debate was concluded in the Senate yesterday, Senate President David Mark referred the matter to the Committees on Finance and Local and Foreign Debts for more legislative inputs, asking them to submit their reports in a week's time.

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