Senate Approves President Buhari’s $22.7 billion Loan Request

Senate Approves President Buhari’s $22.7 billion Loan Request

The Senate has approved a $22 billion external loan requested by President Muhammadu Buhari, following an executive session that lasted for over 40 minutes.

The approval was sequel to the consideration of the report of the Senate Committee on Local and Foreign Debts.

The chairman of the committee, Clifford Ordia (PDP, Edo), read the report and recommended that the Senate approve the request.

Prior to the approval, there were arguments between lawmakers and the Senate president that lasted for over half an hour.

The arguments

Both the majority and minority leaders, Abdulahi Yahaya and Enyinnaya Abaribe, suggested that the report be considered in detail to avail the senators full knowledge of line item and details of the request.

Other lawmakers also faulted the exclusion of some parts of the country in the proposed projects.

Adamu Aliero was the first to raise concerns. He wondered if Nigeria is borrowing the money to construct a road from Lagos to Abidjan and if Nigeria is so generous to consider this up to Abidjan. He described the loan as lopsided.

“The East-West road is a very good project and I support fully the inclusion of this project in the borrowing plan. If you look at other parts of the country, nothing is said about the North East,” he said.

“The application of this loan is lopsided and I want to say that other geo-political zones should also be considered. We have dilapidated roads all over the country. I don’t see why huge amount of money like this will be concentrated in only one section of the country. When we come to the clause, we should include critical parts that should be covered on this loan.”

The Senate President, Ahmad Lawan, simply said asked the lawmakers to be conscious that the capital aspect of the budget funding is needed.

“If we notice any lopsidedness, I think it may not be for this Senate to just include the projects but it is important that the executive takes note of these areas that were left out and in the next phase we consider those areas that are left out,” he said.

Disagreeing with Mr Lawan, the minority leader, Enyinnaya Abaribe, suggested that only some part of the loan be approved.

“It is when we get to the point of looking at each one of them that we will now determine which of these projects will help in growing our economy. Now that you have said we will take it line by line,” he said.

But he was interrupted by Mr Lawan who said the Senate cannot leave its procedure and do things differently.

“When we vote, you can like to vote against everything if you don’t want or you can amend. Let me make this point very clear. This is a request and what I said is, this is to fund our capital budget, it means the capital budget is weighty.

“Until we pass, there will be no implementation of the capital budget so it is a choice. If we want, we pass, if don’t want, we don’t pass. We are going to make it tight spending this money,” Mr Lawan said.

Both the majority leader, Abdullahi Yahaya, and Albert Bbassey(Akwa Ibom, PDP) sided with Mr Abaribe.

While they warned that debts cannot develop an economy, they advised that the loan be considered item by item – especially with projects relating to China.
But Mr Lawan insisted that the consideration will be done as a whole and a voice vote will be put for senators to vote.

The argument continued for a while with Mr Lawan insisting it will be done as he said.

After minutes of silence and consultations, Mr Yahaya moved that the matter be discussed in a closed-door session – which was adopted.

Consideration and passage

Upon resumption, the lawmakers unanimously adopted the recommendations of the committee.

The Senate approved $22.7 billion (22,798,446 773) under the 2016-2018 Medium Term External Borrowing (Rolling) plan.

The funding agencies include:

a. World Bank – $ 2, 854,000,000
b. Afrivan Development Bank (ADB) – $1,888,950,000
c. Islamic Development Bank (IDB) – $110,000,000
d. Japan International Cooperation Agency (JlCA) – $200,000,000
e. German Development Bank (KFW) – $200,000,000
f. China Exim Bank – $17.065.496.773
g. French Development Agency – (AFD) $480,000,000

The Senate also approved that the loan/financing agreement containing the whole terms and conditions of the loan from the funding agencies, be forwarded to the National Assembly prior to the execution of same for and proper documentation.

Mr Buhari had on November 28, forwarded a request to the Senate to reconsider and approve the federal government’s 2016 to 2018 external borrowing plan to help Nigeria finance the capital component of the budget for 2020.

The loan, he said, is to execute key infrastructural projects across the country between 2016 and 2018.

The president had sent the same request to the eight Senate under Bukola Saraki in 2016. He had requested for about $30 billion.

The then lawmakers, however, rejected the request as majority voted against it when it was brought for consideration.

In in his recent letter, Mr Buhari explained that the external borrowing plan targets projects cuts across all sectors with special emphasis on infrastructure, agriculture, health, education, water supply, growth and employment generation.

A former lawmaker, Shehu Sani, had explained that the eight Senate rejected the President’s loan request to save Nigeria from sinking into the dark gully of a perpetual debt trap.