Fayose writes Chinese Government to stop Nigeria’s loan request

The rift between the Ekiti State Governor, Ayodele Fayose, and President Muhammadu Buhari-led federal government took another dimension as the governor wrote a scathing letter to Chinese authorities urging them to halt a $2 billion trade loan to Nigeria.

In the letter dated April 12, a copy of which was made available to PREMIUM TIMES on Thursday, Mr. Fayose said the Chinese authorities should know that all Nigerians, notwithstanding their political and religious affiliations, are against any applications for new foreign loans. He said servicing current debt burden already gulps over 25 per cent of the country’s annual budget.

The Chief of Staff to the governor, Dipo Anisulowo, delivered the letter. which has the reference number EK/GOV/28/10, to the Chinese government through the country’s Ambassador to Nigeria, Gu Xiaojie, in Abuja Thursday.

An accompanying statement hinted that Mr. Fayose will personally deliver a copy of the letter to Chinese President Xi Jinping as part of his ongoing official trip to that country.

Mr. Fayose accused Mr. Buhari of attempting to obtain the loan under false pretences because some of the projects for which federal government sought the loan were not captured in the 2016 appropriation bill.

The letter read in part: “I write as one of the major stakeholders in the project Nigeria, and a governor of one of the federating units making up Nigeria, to draw your attention to report that the Federal Government of Nigeria is on the verge of obtaining a $2 billion loan from the Export-Import Bank of China.

“This $2 billion loan is part of the N1.84 trillion the Federal Government of Nigeria has proposed to borrow to finance the 2016 budget, which is yet to be signed by the President, Muhammadu Buhari owing to unending controversies between the Executive and Legislative arms of government.

“According to reports, Nigeria desires to raise about $5 billion abroad to cover part of its 2016 budget deficit. This is projected to hit N3 trillion ($15 billion) due to heavy infrastructure spending at a time when the slump in global oil prices has slashed the country’s export revenues.

“While conceding that all nations, especially developing ones need support to be able to grow because no nation is an island, I am constrained to inform you that if the future of Nigeria must be protected, the country does not need any loan at this time.

“The government of China should be mindful of the fact that Nigerians, irrespective of their political and religious affiliations are totally opposed to increment of the country’s debt burden, which is already being serviced with 25 per cent of the Federal Government annual budget.

“It will interest the government of China to know that some of the projects for which the loan is being sought are not captured in the controversial 2016 budget, which has been sent to the President by the National Assembly for his assent. For instance, the Lagos – Calabar Rail project was not included in the budget proposal the President presented to the National Assembly and it was not included in the Appropriation Bill passed by the National Assembly.

“Most importantly, Nigeria is presently servicing debt with about 25 per cent of its annual budget and what will happen to the economy in 2017, when the country will begin to service the additional debt to be incurred this year is better imagined than experienced.

“The Chinese government must also be aware that some western nations approached by the Federal Government for loan diplomatically and cleverly declined.

“Therefore, like the foreign aid that is reportedly being mismanaged, whatever loan that is granted to the Federal Government of Nigeria by the Chinese Government may be mismanaged too.”

Mr. Fayose told the Chinese government that Mr. Buhari had claimed that Nigeria has enough money accrued from the implementation of the Treasury Single Account and increased tax revenues.

“It is also important for the Government of China to note that the Federal Government of Nigeria claimed to have recovered and still recovering trillions of Naira allegedly looted from the treasury. For instance, over $200 billion is expected to be recovered from Dubai, the United Arab Emirate while N3 trillion was said to have been saved from the Treasury Single Account (TSA).

“The Federal Inland Revenue Service (FIRS) has also said that it will generate not less than N4.5 trillion this year. What then is the rationale behind the $2 billion loan from China?”

But Chris Ngwodo, a foreign policy analyst, said Mr. Fayose is only making a mincemeat of himself on the international stage because he has no legal or strategic standing to write such a letter to either Chinese authorities or any foreign government with diplomatic ties to Nigeria.

“The loan is part of our economic policy which is also tied to our foreign policy. And you know foreign policy falls completely under the purview of the federal government and President Buhari is current the custodian of that authority, so I don’t know what informed Mr. Fayose’s letter,” Mr. Ngwodo said.

Mr. Ngwodo admonished Mr. Fayose to focus on addressing fundamental issues that affect his state residents rather than attempting to usurp the undisputed power of the federal government.

“Right now, Ekiti State is functionally bankrupt with workers having to endure several months of unpaid salaries,” he said. “I think it will be in his best interest to focus on that rather than embarrassing himself by attempting to usurp the power of the federal government, which is incontrovertible.”