$30BN LOAN: Buhari strikes deal with Nat’l Assembly

More than five months after the Senate rejected a $29.96 billion loan request from President Muhammadu Buhari, the Red Chamber, on Wednesday, made a U-turn, following a deal struck between the presidency and the leadership of the National Assembly.

In the resubmitted request, President Buhari is seeking the nod of the National Assembly to secure a $5.851 billion from the China Exim Bank.

He is also asking the National Assembly to approve another $6.926 billion from the World Bank. The two loan requests total $12.912 billion.

According to the breakdown of the loan request, Lagos-Kano railway modernisation project and the Lagos-Ibadan segment will gulp $1.231 billion.

The Lagos-Kano railway modernisation project and Kano-Kaduna segment will take $1.146 billion, while the Coastal Railway project, Lagos-Calabar segment is expected to gulp $3.474 billion. The three components are part of the loan request from China Exim Bank.

Part of the $6.926 World Bank loan request, will be used to finance projects in the Boko Haram ravaged North-East and also provide social inclusion and welfare advancement project.

Polio eradication support and routine immunisation project will get $125 million. Community and social development project will gulp $75 million, while Nigeria’s states health programme investment project will take $125 million.

State education programme investment programme investment project is to take $100 million. Nigeria youth employment and social support project is expected to get $100 million. Fadama 3 project is go get $50 million.

Part of President Buhari’s letter reads: “As you are aware, the funds available under the China/Africa fund are limited and loan applications from all African countries are funded based on first come first serve. And therefore there is an urgent need for us to sign these loans as soon as they are approved or we will lose out in the event that we delay in signing the loan agreement. These loans form part of our overall rail funding strategy.

“We are already in the process of completing the concession of the Port Harcourt to Maiduguri line to immediately link the eastern part of the nation. We fully intend to source further consessioning funding to ultimately upgrade this critical line to high speed standard guage line. These projects form part of our overall plans to rescusitate the rail transport across the nation and thereby drive inclusive growth.

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“You may also recall my earlier request for the speedy clerance of some emergency projects earmarked for the North East in the 2016-2018 borrowing plan. You will also recall that my request was based on the need to consolidate the relative peace at that time. Since then the situation as you are aware, has changed dramatically and introduced even more urgency to the situation in the zone than ever before.

“While the capture and destruction of the stronghold of Boko Haram in Sambisa forest was welcome news, the recent and unfortunate incident of the bombing of an IDP camp by mistake with loss of civilian lives, brings to fore the need to resettle the people back to their homes quickly in other to avoid such incidence in the future.

“However, for us to be able to do this, there is need for urgent consideration of the identified projects, which will enable us to start reconstruction and rehabilitation of the region in other to create jobs for the people and rehabilitate the schools to get the children of the streets into schools.”

“I wish to also inform the Distinguished Senate that our national Social Safety Net programme, which is intended to assist the poor and most vulnerable people in our society nationwide started this January 2017 with the first cash transfer payments in eight states.

“However, for us to expand the programme to all the states, we need additional resources in addition to our 2017 budgetary allocation.

“Giving the current state of our economy and the need to urgently address some of our infrastructural deficiencies in other to quickly improve the livelihood of our people, it has become imperative that we work together in an expeditious way to get our economy out of recession and back to growth.

“Distinguished Senate, an expeditious consideration and approval of these requests will go a long way in bringing stability to the North East and improvement on the infrastructure and by extension a great improvement in the economy and livelihood of our people.

“In view of the above, the Distinguished Senate is invited to urgently consider and approve all the above projects totalling a sum of $6.926billion to enable us commence the construction and rehabilitation of the North East, provide for the poor and most vulnerable people and commence rail projects in ernest,” the letter further read.

On November 1st, 2016, President Buhari forwarded a request to both chambers of the National Assembly to approve his request to borrow $29.96 billion to finance projects cut across all sectors with special emphasis on infrastructure, agriculture, health, education, water supply, growth and employment generation, poverty reduction through safety net programmes and governance, as well as financial management reforms.

Lawmakers had revealed then that they rejected the President’s loan request because of the non-attachment of the breakdown of the $29.9 billion external borrowing plan to the letter sent to the Senate.

The second reason, then was that President Buhari refused to send Federal Government’s 2016-2018 borrowing plan contained in the last paragraph of the letter.

“The President in the letter said there was an attachment containing the breakdown of the external loan request. But there is no attachment. President Buhari did not attach the breakdown. There is no way we can consider such a request.

“Secondly, the president has not sent Federal Government’s 2016-2018 borrowing plan to the Senate. That ought to have been sent first for consideration and passage before this request. If we consider this request, how do we do that? These are the obvious reasons. There is no political undertone here,” a lawmaker had told our correspondent.

Part of the first paragraph under dispute then read: “I wish to refer to the above subject and to submit the attached draft of Federal Government 2016-2018 External Borrowing (Rolling) Plan for consideration and early approval by the National Assembly to ensure prompt implementation of the projects…”

The last paragraph under dispute then read: “…it has become inevitable to request for the National Assembly leadership approval pending the consideration and approval of the 2016-2118 borrowing plan by the National Assembly to enable us disburse these funds immediately.”

Making further clarification on the rejection in November, immediate-past Senate Leader, Ndume told Senate correspondents: “I was shocked. I think it was defeated on technical grounds. I will try and reintroduce it again. We must not throw the baby and the bad water away. It ought to have been referred to the relevant committee, but because of the omission of some things, it was rejected.

“We expect them to include the things. There is nothing to worry about. We will do what is right. We will look at it on the basis of merit. We will do this as the best way we can. Those things that are necessary will be included.”

 

 

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