Minister of Finance, Ngozi Okonjo Iweala
By Onwuka Nzeshi
The Federal Government has borrowed a total of $4.4 billion in external loans in the past seven years. Of this amount, which was approved by the World Bank, only $1.8 billion has been disbursed while the balance continues to attract a service charge.
The revelation came just as the House of Representatives endorsed the Federal Government's 2013-2015 External Borrowing Plan.
A report on the investigation conducted by the House of Representatives Committee on Aids, Loans and Debt Management on the 2013-2015 External Borrowing Plan placed a ceiling on external borrowing at $7.3 billion as opposed to the over $9 billion proposed by the Federal Government.
According to the report, Nigeria has risen to become the largest recipient of disbursements from the International Development Agency (IDA) between 2009 and 2012 and currently has the largest outstanding IDA portfolio in Africa, ahead of Kenya and Tanzania.
However, the report said Nigeria's external debt profile remained at a level where it could accommodate more loans without violating the internationally accepted 40 per cent Debt/GDP ratio and the 25 per cent country specific threshold for debt stock levels.
Chairman, House Committee on Aids, Loans and Debt Management, Hon. Adeyinka Ajayi, who presented the report to the House, observed that the federal and state governments that have proposed fresh external borrowings have justified their demands and have acceptable debt sustainability levels.
The purposes for which the borrowings are being requested, Ajayi said, were in substantial compliance with the provisions of the Fiscal Responsibility Act 2007, being for capital projects and human capital development.
The facilities, he observed, would be obtained under concessionary terms with zero per cent interest rates, except the China Export-Import (EXIM) Bank loan at a 2.5 per cent rate of interest, and considerable moratorium and amortisation periods.
Meanwhile, the House of Representatives has demanded the submission of half-yearly reports on all existing external loans taken by federal and state governments to the National Assembly.
The reports, it said, must contain relevant information such as the principle amount, the amount drawn down, the balance, expected use of the credit facility, and what has actually been achieved with the amount borrowed.
Sections 41,42, 44 and 47 of the Fiscal Responsibility Act prescribe conditions for borrowing and verification of compliance limits upon which the National Assembly could base its approval for borrowings.