Minister of Finance, Dr. Ngozi Okonjo-Iweala
The Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, and several state governors represented by their state Finance Commissioners Thursday, appeared before the Senate to defend the $7.9 billion foreign loans sought from the Exim Bank of China, Islamic Bank, African Development Bank (AfDB) and the French Development Bank (AFD).
The project is part of Federal Government’s proposed pipeline projects under the Medium Term 2012 to 2014 External Borrowing Plans, which is before the Senate Committee on Foreign Loans and Debt.
However, the Chairman of the Committee on Foreign Loans and Debt, Senator Uzamere Ehigie, who expressed disappointment over the absence of some states because of the implication of the facility, threatened to shut out state governments, which were not represented at the meeting.
States not represented during the presentation and defence included Ondo, Rivers and Delta.
But, Okonjo-Iweala, who was represented by the Minister of State for Finance, Mr. Yerima Ngama, had earlier sent the proposed pipeline projects foreign borrowing plan to the upper chamber, which had scaled through several deliberations and readings before it was transmitted to the various committees for final scrutiny.
The commissioners, who represented their various state governments, however, complained of their inability to get disbursement on the external borrowing approvals last year despite satisfactorily scaling all laid down procedures for the loans.
Ehigie assured stakeholders in the project that the lawmakers would do justice to all the issues raised in the projects implementation, evaluation and monitoring of the plans in order to achieve the purpose for which they are being sought.
He stressed that there were communication gaps between the Ministry of Finance and the state governments, stressing that such grey areas should be expeditiously resolved henceforth.
Ehigie urged Okonjo-Iweala to look into the issues raised by the Finance Commissioners with the view to reconciling them.
Ehigie said: “We are here to represent you and again, Nigerians want to know what you do with the money, so it is fair for us to bring all issues to the table before conclusion.
The breakdown of the loans revealed that all states in the country applied for the loan of about $3.39 billion, while the Federal Government applied for $4.8 billion. Continuation of Eurobond Issuance $1 billion, Diaspora bond$0.1 billion putting the loan of the loan at $9. 005.69 billion.
In her remarks, Okonjo-Iweala explained that the repayment period of the loan was about 40 years and it is concessional loan which is quite different from other previous borrowing plans.
The Minister stressed that states had been banned from negotiating for external loans individually in order to ensure that the interest rates of the loan are the same.
While responding, the Imo State Commissioner for Finance, Mr. Chike Okafor, stated that his state was submitting a proposal for $45 million and $20 million respectively, being the cost of erosion management and youth empowerment support projects.
Inside the document, the Federal Government would borrow $300 million to support the provision of the affordable houses by the private sector for Nigeria at low interest rate and long term repayment period to provide cheap funds for buying or building houses by Nigerians.
Also, $200 million would be borrowed to support
agriculture in the country. The money would make for the provision for seeds, fertilisers and agrochemicals. It will also be used to develop data base and research through the West Africa Agricultural Productivity project.