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How $9.3bn Foreign Loan Debate Splits Senate

11 Nov 2012

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David Mark


On Wednesday,  members of the upper chamber  barred their minds passionately on a bill that would touch on all aspects of the country for good or bad, an executive bill seeking expedited action for a loan facility. The debate on the bill broke the senators into different camps. Dele Ogbodo captures the proceedings…

 
Introducing the Bill

This followed the usual order of proceedings in the upper chamber, having been granted permission by the Senate President David Mark, Senate Leader Victor Ndoma Egba sets the ball rolling when he introduced the Executive bill which demanded for approval of an aggregate sum of $9.3 billion as foreign loans from five different sources into government’s planned Medium Term External Borrowing Plan. Senator Egba said the loan was designed as an initiative towards total transformation of the entire economy. The facility, he said, would be sourced from the World Bank, African Development Bank (ADB), Islamic Development Bank, French Development Agency and Exim Bank of China. He said: “The objectives of the projects cut across the various sectors of the economy and the projects to be funded and the amounts of loan and terms and conditions were set in an Annexure made available to lawmakers.”

At this juncture,  Mark opened the floor for the lawmakers to react to the motion. The reactions to the motion generated so much debate, resulting in polarisation of Senators into camps such that the Senate President in his wisdom sought for a broad based committee to deal with the issue. This resulted in merging both Committees of Finance and that of Local and Foreign Debts and given the mandate to carry out a thorough investigation on why the country needs the facility. They are to report back to the House next week
   
Senators Backing the Loan
The Deputy Senate President Ike Ekweremadu, Senators Ayogu Eze, Ganiyu Solomon, and George Thompson Sekibo are all in this camp. Also in the camp is Senator Nkechi Nwogu from Abia North Senatorial District. Senator Ekweremadu stated that he was passionate about Nigeria taking the facility because at this critical stage the country’s infrastructure needed a turnaround and this cannot be financed solely through internally-generated revenue alone. He said:  “Let me also inform you all my dear colleagues that these items on the loan form part of the financing items for the 2012 budget and the year is coming to an end if you look at these issues you can see some of them are very critical some of which including flood control and management”. According to him, it is important the Senate approves the borrowing plan. “As a country, we have this phobia about borrowing but the United States of America (USA) as great as they are remains one of the most indebted countries in the world.

“What is important in borrowing is the actual utilization and the proper channeling, if you look at some of the items like water reform, management  of  hospitals, etc; all these are critical for us as a developing country so if these loans can be accessed as quickly as possible and we apply them for the purpose which it is presented today, it will help us to acquire the infrastructural requirement of the country and make life much better for all of us,” he said. According to him, one of the reasons why Nigeria belongs to these international organisations is they act as a source for long and low interest terms of loan repayments.  “So I think we should avail ourselves of the opportunity. “So there are even grace periods for these loans so I believe that it is in the best interest of Nigeria that we take these facilities and as quickly as possible apply them for the purpose for which they are stated and of course, it is our responsibility in the oversight function to ensure the proper utilization of the facility.”   

Senator Ayogu Eze, in his contribution, added that no country could develop to its full potentials with all the resources it generates within its border, so the principle of borrowing is a global principle. “We need these loans because we are trying to address the critical infrastructure that have been pulling the country back,” he said.  “Everybody talks about the state of our roads, the road will continue to be the way they are even if we fix all of them and don’t develop other mode of transportation. However, I didn’t see much emphasis on developing the waterways because all over the world goods are transported mainly on the rail track and on waterways while the road is freed up for light goods and passengers services.” According to him, the committee should try and engage the Executive to see whether they can develop these other means of transportation. “So I support that we take this borrowing fast as we have committed ourselves by approving the Medium Term Expenditure Framework and one of the concomitant events that will follow is the approval of these loans.”

Senator Sekibo said the motion could be justified on several grounds, adding that the country’s infrastructure is in bad shape he said the infrastructure are the basic needs for the development of the country, which cannot be financed using the annual budget alone.  He said if approved finally the loans would help in fast tracking the economic development of the country. He said: “We are aware that several pipelines have been vandalized in recent times in the oil producing areas.” Senator Solomon while adding his voice to the request said he would support the bill believing that it would pass through second reading that it would be well investigated by the enlarged committee. He said: “In doing justice to this bill, the committee must critically look at the various items under the proposal. By late 70s we started borrowing which culminated in the country emerged huge foreign and local debts which made the country to part with $12 billion recently to get out of the mess, if we are guaranteeing these loans that is being sourced, the Debt Management Office (DMO) should be up and doing to be able to keep track of these loans which are used for the areas that they are meant for so we do not burden the in-coming generations.”

Tags: Politics, Nigeria, Featured, Foreign Loan

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