Home Finance Commotion as Nigeria’s Senate Approves President Buhari’s $22.7b Loan Request
Finance - News around Africa - Profiles - March 6, 2020

Commotion as Nigeria’s Senate Approves President Buhari’s $22.7b Loan Request

Yesterday was a hostile meeting in the Nigerian Senate as the lawmakers were occupied with warm contentions on the $29.96 billion loan request made by President Muhammadu Buhari of the Federal Republic of Nigeria, for infrastructural development.
Although the approval of the loan which was reduced to $22.7billion was eventually granted, the solidarity among the legislators was debilitated.
It turned into a direct confrontation between those opposed to the immediate approval of the loan and those who wanted to have an in-depth discussion on each topic of the proposal.
Senate President Ahmad Lawan, the Minority Leader, Eyinaya Abaribe, and the Majority Leader, Abdullahi Yahaya were locked in very bitter arguments regarding the method to be used.
The commotion degenerated into an initial deadlock that forced the Senate into a closed-door session which lasted for about 30 minutes. It was revealed that at the closed-door session, the debate became partisan in nature. And when the door was opened, the leadership of the minority, including Abaribe, was clearly absent. It was later learned that they had chamber at the conclusion of the closed-door session.
The contentious issue was that while Lawan preferred the matter to be dealt with by voting based on the recommendations in the report by the Committee on Local and Foreign Debts, other senators wanted all the issues raised in the loan application to be addressed and discussed in detail so as to give Nigerians an opportunity to know why the loan was approved.
The Chairman of the committee, Clifford Ordia (PDP, Edo), read out the report which recommended that the Senate approve the request.
The Senate had begun considerations on $22.7-billion loan as requested by President Buhari when Adamu Aliero came under Order 43 to say the report was huge and voluminous, therefore, it would not be fair for the chamber to just receive it and act on it without probing.
He said: “This is something to do with a foreign loan to the tune of $22.9billion. I, therefore, strongly suggest that you allow us to go through this report this week.
By then, we will be in an informed position to treat it and do justice to it whereby Nigerians would know that we are serious in dealing with the weighty issue.”
But Lawan appealed to his colleagues for the report to be debated, saying the media would feast on it if they allow it linger till next Tuesday when the report would have leaked to the press.
“If we are going to postpone the deliberation of the report, we have to keep the document out of the press, otherwise, the media will discuss it before the Senate discusses it and we would lose relevance.
“I believe that we have to weigh it whether we are prepared to delay it, but I agree with your point. The only consolation I have from where I sit is that we have a committee that helped us in putting these things together.
“I believe that we trust our committee on what they have done. I want to believe that where we have issues, we can raise the issues. But the risk we have is that if we don’t consider it, this thing will just go out and it will be out of our hands.”
The minority leader tried to come under Order 43 and later Order 14 to ensure the Senate examine the report part by part and sector by sector so that the lawmakers could have a complete grasp of aspects of the loan requested by President Buhari, that are relevant to boosting the economy. But Lawan insisted on voting according to recommendations.
Later, the Majority Leader, Abdulahi Yahaya, also suggested that the report be considered part by part to avail the senators full knowledge of every line item and details of the bill.
When the delay became obvious, Gabriel Suswan asked Lawan to allow the Senate to go into an executive concourse because he was privy to a report on the power that he could not divulge on the floor.
Again, Lawan insisted that the consideration would be done as a whole and a voice vote would be put for senators to vote.
Consequently, the decision to discuss behind closed doors was preceded by back and forth contentions between the other lawmakers and Lawan which lasted for over half an hour.
The Senate President insisted that they had arrived a point of no return, but later yielded to pressure as the chamber went into a prolonged closed-door session.
After flashes of silence and consultations, Yahaya moved that the Senate go into a closed-door session for additional deliberations.
When the lawmakers resumed, they appeared to have come to an agreement as they approved the $22.7billion loan request.
Aliero, who also spoke on the Lopsidity of the projects covered by the loan, asked whether Nigeria was borrowing the money to construct the roads from Lagos to Abidjan.
“Are we so generous to consider this up to Abidjan? Secondly, 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. 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 a 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.”
Lawan interjected, saying they were not doing a second reading on the report.
“We have recommendations which we will vote on, but before we reach that stage, what is here is what is to finance our capital budget and, therefore, it is important we are conscious that we need the capital aspect of the budget funding.
“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.”
Again Abaribe came up saying that he disagreed with the president of the senate on the aspect that the loan is part of the capital budget.
“That is not the position. The position is that we would now approve some of these. It is when we get to the point of looking at each of them that we will determine which of these projects will help in growing our economy. You have said we will take it line by line.”
Lawan, however, denied saying so.
“I said we are going to vote on the recommendations. And the minority leader, you have been long enough in this Senate to know that there is nothing like line by line for this kind of report. It is normally the recommendations of the committee that are voted on.”
Abaribe admitted that he might have misspoken if he had said line by line.
“I am saying each recommendation because I have some reservations.”
Lawan said there was no way they break the Senate’s procedure and do things differently.
“When we vote, you can vote against everything 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 we don’t want, we don’t pass. We are going to make it tight spending this money.”
Abaribe ended his contribution by saying: “I just want to end with a very apt saying which I think the whole world knows: ‘who goes a-borrowing, goes a-sorrowing.’”
Yahaya said that there was no economy in any part of the world where debt was not used for growth The problem, he said, was that the National Assembly and the Executive had not been monitoring the use of the funds to ensure that they were spent in the right places where revenues could accrue to the wider economy to pay off the debts and increase the investment income.
Barbie replied: “All I wanted to point out which we are finding out on this floor that you don’t want us to do is that we are saying there are some aspects to the loan that we must have to vote on, to decide if they are in our interest or not.
The Senate leader says that is what he wants also. Now we want to make our input, we are being told, either pass or not pass, and I think that is not very good for the economy of this country.”
Again, Lawan interjected, saying: “I don’t want the discussion of this loan to degenerate into partisanship. This is for our country.”
And responding, the minority leader said: “You are putting us in a very impossible situation because you are telling us to pass even those things that you don’t approve of. This is also about Nigeria.
“This is not about partisanship. Actually, if we are going to talk about partisanship, some of us have complained that this is lopsided and we didn’t want to make an issue of it.
I want us to ask if we should take this issue item by item because we cannot just wholesomely pass everything that comes. If we have to do that, we don’t need to sit here and debate anything.”
The Senate President then explained that there was nothing like trying to separate something. “I don’t even believe in that, to accuse me of separating the minority. You are behaving like the majority, everyone is just listening to you.”
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.
The loan, he said, was to execute key infrastructural projects across the country between 2016 and 2018.
The president had sent the same request to the eighth Senate under Bukola Saraki in 2016. He had requested about $30 billion.
The then lawmakers rejected the request as the majority voted against it when it was brought for consideration.
In his recent letter, Buhari explained that the external borrowing plan targets projects that cut across all sectors with special emphasis on infrastructure, agriculture, health, education, water supply, growth, and employment generation.
A former senator, Shehu Sani, had explained that the eighth Senate rejected President Buhari’s $22.7-billion loan request to save Nigeria from sinking into the dark gully of a perpetual debt trap.
In its reaction, the Peoples Democratic Party (PDP) berated the All Progressives Congress (APC) senators for approving a fresh $22.7 billion loan, which it said had been rejected by Nigerians across the board.
The party said: “In approving more financial burden on our nation, the APC senators have further shown that their party does not have the interest of Nigerians at heart, but is only out to repress and plunge our citizens into more hardship just for their selfish gains.”
The PDP, in a statement by its National Publicity Secretary, Kola Ologbondiyan, said it was distressing that the APC senators approved the loan, even when the Buhari presidency had not justified the request; a situation the party noted: “validates apprehensions that the APC senators have become rubber stamp legislators.”
The Human Rights Writers Association of Nigeria (HURIWA) described as unconstitutional the decision of the Lawan-led Senate to approve President Buhari’s request for a $22.7 billion loan despite objection from some senators.
The rights group believes that the collection of the foreign loans which would inevitably be re-looted by government officials offends several provisions of the Nigerian constitution including sections 16(1); (2) which opposes excessive borrowings that make Nigeria a slave of external jurisdictions and impedes our national drive for self-reliance.
In a statement, HURIWA submitted that “the constant flying around cap in hand by Buhari to borrow from all conceivable creditors from all around the world is tantamount to converting Nigeria to a beggarly economy which is against these constitutional provisions.”
The group, in the statement endorsed by the National Coordinator, Emmanuel Onwubiko and the National Media Affairs Director Miss Zainab Yusuf said: “We all know that when Nigeria had an activist National Assembly headed by Senator Bukola Saraki, this move by Buhari to mortgage Nigeria to the enslavement of the Chinese creditor was rejected.”
The Lagos Chamber of Commerce and Industry (LCCI) and Manufacturers Association of Nigeria (MAN) expressed concerns about the Federal Government’s capacity to service debt.
According to the members of the Organised Private Sector (OPS), the growing national debt is a cause for concern as the profile has grown from N12.6 trillion in 2015 to N26.2 trillion in 2019 third quarter, an increase of 108%. With oil prices trading below the 2020 budget benchmark, they noted that in the 2020 budget, debt service commitment and recurrent spending were beginning to crowd out capital expenditure, adding that the trajectory was not consistent with the country’s national aspiration to build infrastructure and a competitive economy.
The member of the OPS opined that an additional $22.7 billion borrowing would bring the total debt stock to $108 billion. although 15 per cent of these are debts owed by the state governments. The capacity to service the current stock of debt raises serious sustainability concerns. For instance, the debt service provision in the 2019 budget was a whopping N2 trillion whereas the total capital budget was N2.9 trillion. This implies that the debt service commitment was 70 per cent of capital budget allocation. The debt to revenue ratio was about 30 percent, which is also on the high side. In the 2020 budget, the total revenue could barely cover debt service commitment and recurrent spending.
Director-General of MAN, Segun Ajayi-Kadir, stated that the 39 emergency projects in the power, agriculture, transport and mining sectors of the economy which calls for the president’s immediate attention should be redressed by the loan.
However, he expressed concern over the rising debt profile of Nigeria, especially the capacity of the government to effectively service it and at the same time meet the increasing needs and aspirations of the people.
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