Furore over Buhari’s Whooping $27.7 Billion Loan

Furore over Buhari’s Whooping $27.7 Billion Loan

…CUPP in Court, Says the Administration Will Mortgage Country’s Future …Buhari Has Taken More Loans in Three Years Than the Country Took in 30 Years–Atiku …We Need to Borrow to Meet Our Infrastructural Development Deficit—Finance Minister Part of the furore generated over the $22.7 billion loan approved by the National Assembly, played out at the

…CUPP in Court, Says the Administration Will Mortgage Country’s Future

…Buhari Has Taken More Loans in Three Years Than the Country Took in 30 Years–Atiku

…We Need to Borrow to Meet Our Infrastructural Development Deficit—Finance Minister

Part of the furore generated over the $22.7 billion loan approved by the National Assembly, played out at the Federal High Court which has started hearing in the two Suits filed by the Coalition of United Political Parties (CUPP) Spokesperson, Mr Ikenga Imo Ugochinyere  on behalf of the Opposition (using the Action Peoples Party APP) against the Federal Government of Nigeria, President Muhammadu Buhari, Attorney General of the Federation, Export –Import Bank of Nigeria, African Development Bank (AfDB), Minister of Finance and the National Assembly.

The National Assembly had earlier in the week approved another set of loans for President Buhari administration in two tranches of $5.5 Billion and $22.7 Billion Dollars. The Party is contending that the Federal Government and President Buhari are mortgaging the future of the country by taking excessive loans.

It also argued that the distribution of the $22.7 Billion loan is lopsided since the entire North East and South East did not get any projects included within their geopolitical zones coupled with the facts that the loan is tied to frivolous/wasteful projects that will not add any economic value like the 500 million dollars being planned to be wasted on the upgrade of NTA, the government owned TV station

The judge, Justice Ijeoma Ojukwu has adjourned hearing to both Suits to July 1st, 2020.

Atiku Knocks Loan

Former Vice President, Mr Atiku Abubakar had earlier warned President Muhammadu Buhari against taking more external loans, accusing him of plunging the country into greater debts in three years than it ever experienced in 30 years.

Atiku said Nigeria, under the administration of Buhari, has taken more loans in the last three years than it did in the 30 years preceding 2016. He described the monumental increase in borrowings vis-à-vis an unprecedented reduction in investments in education as worrisome.

“Two weeks ago, a friend of mine, Prof. Anya O. Anya, revealed that Nigeria has taken more loans in the last three years than she has taken in the 30 years preceding 2016.

“I am a businessman. Perhaps the first lesson one learns in business is that you do not take loans except it is to expand your business. There is no justification for taking out loans to pay salaries; meanwhile, you are not investing in your future generation.

“Nigeria’s greatness is not as tied to her elders as it is tied to her youth. That is where our investments should be focussed on,” Atiku added.

Project Breakdown Under Loan

The Senate in March gave a breakdown of the projects to be undertaken with the $22.7 billion loan as follows:

Agriculture & Water Supply

* Rural water supply and sanitation – $150,000,000 (Taraba, Borno, Yobe and Gombe);

* Agriculture, Transformation Agenda Support Project – $200,000,000 (Nationwide);

* Staple Crops Processing Zone Projects – $500,000,000 (Nationwide);

* Institutional Strengthening and implementation of policy reforms – $33,750,000 (domiciled at the Federal Ministry of Works and Housing);

* Emergency Road Rehabilitation and maintenance – $434,700,000 (Federal Ministry of Transportation);

* Development Finance Project -$450,000,000 (Federal Ministry of Finance);

* Lake Chad Basin Commission – $13,000,000 (Nigeria, Chad, Niger, Cameroon Libya and Central African Republic).

Power Sector:

* Nigeria Electricity Transmission and Access Project, Power Transmission Project, TCN overall Transmission system enhancement project, vocational training in the power sector and Mambila Hydro Electricity Power Project – $5,614,000,000;

* Ministry of Communication and Digital Economy: National Information and Communication Technology Infrastructural Backbone by Galaxy Backbone (Phase II) – $328,108,731.

Education Sector :

* Education Sector Reform Programme renamed Batter Eduation Service Delivery for All – $500,000,000.

* Ministry of Niger Delta Affairs: East West Road Project – $800,000,000.

* Information and Culture Ministry: NTA Digitization Project – $500,000,000.

Mines and Steel Sector:

* Development of the Mining Industry Project – $150,000,000.

* Federal Capital Territory: Greater Abuja Water Project – $381,095,037 and Abuja Mass Rail Project – $1,252,293,00

Transportation Sector:

* Lagos-Kano Railway Modernisation Project (Ibadan-Kano Segment Double Track) – $5,530,000,000;

* Railway Modernisation Coastal Railway Project (Calabar-Port Harcourt-Onne Deep Sea Port Segment – $3,474,000,000.

* Ministry of Health: Regional Disease Surveillance System Enhancement (REDISSE) Project in West Africa – $90,000,000.

* Ministry of Humanitarian, Disaster Management and Social Development: Social inclusion and welfare advancement project (now National Social Safety Net Project) – $800,000,000.

* Katsina State: Health System Projects – $110,000,000 and the .

* North East Nigeria Integrated Social Protection, Basic Health, Education, Nutrition Services and Livelihood Restoration Project – $100,000,000.

Doubts on Lagos-Calabar Rail Project

Some analysts belief that projects like the proposed Lagos-Calabar coastal rail lines, reputed as a vital project to aggressively tackle the problem of transportation in that axis of the country, appear to have been included to calm frayed nerves over its non implementation

Designed to connect Lagos by rail to Benin City, Warri, Yenagoa, Port Harcourt and Calabar with spurs linking Asaba and Onitsha, it is envisaged that this project will not only largely decongest the heavy traffic on the Lagos-Ibadan, Benin-Shagamu and the East-West highways but also significantly reduce travel time and further propel industrial development around these cities.

The response of the Buhari administration to a project considered as one of the most potentially profitable routes has stoked doubts. After it was virtually consigned to the doldrums, the government appear to have begun  what was perceived as some moonlight tales.

First, the Minister of Transport, Mr Rotimi Amaechi said that an American firm was interested in executing the project. Later after the President’s visit to Russia last October, the country was told by the Senior Special Assistant to the President on Media Affairs and Publicity, Mr Garba Shehu that the Russian government would fund the project. This was re-echoed by Transport Minister, Mr Rotimi Amaechi recently.

Is it not intriguing that the project is listed as No 16: Railway Modernisation Coastal Railway Project (Calabar-Port Harcourt-Onne Deep Sea Port Segment – to gulp the sum of $3,474,000,000, under the breakdown of projects to be undertaken with the $22.7 billion loan?.

If it is true that the Russian government is going to build the Lagos-Calabar rail line, why devote another whooping $3.5 billion for the same project?

Government Proffers Reasons for the Loan

Three cabinet Ministers told the House of Representatives last December, that the borrowing is inevitable if government is to meet the infrastructure needs of the people.

The Ministers, including that of Finance, Mrs. Zainab Ahmed; Works and Housing, Mr Babatunde Fashola, and Minister of State for Transport, Ms Gbemisola Saraki, made the submission at a session with the House of Representatives Committee on Aids, Loans and Debt Management, headed by Hon Safana Dayyabu (APC, Kano).

Also with the Ministers was the Director-General of the Debt Management Office, DMO, Ms Patience Oniha. Specifically, the Ministers appeared before the committee to defend the loan request of $22.718 billion made by President Buhari to the Senate.

They reiterated the urgent need to fund the budget, improve on infrastructure development and create jobs with the loan.

Making her presentation, the Finance Minister, Mrs Ahmed said: “We need to invest on roads, rails, and to be able to grow at a rate better than we are growing now. They are strictly for infrastructure development, so we can address the deficit that we have. We know we must comply with some criteria.”

Placing the borrowing figure at $22.718 billion, the Minister said Nigeria had no debt sustainability problem but revenue challenge, adding that every kobo borrowed would be judiciously utilised.

Also speaking, Minister of Works & Housing, Mr Fashola, said the government could not ignore the demands for infrastructure sustainability.

“It is right to have this hearing because we cannot ignore the concerns of members of the public, the debt profile of the country. As we cannot ignore the concerns about debts, so we cannot ignore the concerns and demands for the provision of life-sustaining infrastructure.

“So, everybody wants a road, everybody wants a rail project, everybody wants a port and efficient airports. They want to ensure that our ports are efficient so that business can function more effectively, so that clearing of goods can happen more quickly and cheaply.

“Where in the midst of these physical challenges that she (the Minister Finance, Budget and National Planning) has identified, the revenue are not just enough to meet these challenges.”

Fashola said there were a total of 524 ongoing road projects across the country but noted that there was no money to execute them.

He said: “524 road projects are currently being executed; N73 billion released this year. We have contractors willing to do the work but we cannot pay them.

“We have had deficit budgets for a long time and so we have to borrow. Over four years, we have never received full funding for any budget. There is deficit and we cannot finance it. We must find a away to finance these assets. We will be spending today’s money to secure tomorrow’s assets”.

Asked to speak on the current status of the East-West Road, the Minister said it was not under his ministry.

But attempting the question, Fashola said a substantial part of the road had been completed.

“East-West Road’s not under my ministry; it is under Niger Delta Ministry. I can say here that a substantial part of that road has been executed. I drove through the stretch in 2016. Large parts of it have been completed,” he said.

On Benin-Auchi-Okene road, the Minister said: “From the briefings from Ministry of Finance, there are external borrowings; there are also internal borrowings. The road is being funded under SUKKUK, which is local borrowing. The SUKKUK is not enough to fund all the roads. We got N100 billion, we share it across all the six zones.”

Denying insinuations that Nigerian roads are not built up to the standard, Fashola said: “Nigerian roads are designed to global standards. We are not doing things as we want but according to global standards.’’

Minister of State for Transport, Ms Sakari, also spoke on the need for the Federal Government to take foreign loans, stressimg the need to complete the Kano-Lagos and Niger Delta coast rails.

In spite of these loans and the recently returned over $300 million Abacha loot, which the administration said will be spent only on three main projects, Fashola told Channels TV on Thursday, that the Lagos-Ibadan Expressway will now be completed in the first quarter of 2022.

The road project, awarded to Julius Berger Nigeria and Reynolds Construction Company Limited (RCC), at a sum of 167 billion naira, was earlier scheduled to be finished in 2021.

Fashola said the delay was due to the coronavirus pandemic, which has slowed construction activities and affected government revenues.

The Lagos-Ibadan Expressway is part of projects funded under the Presidential Infrastructure Development Fund.

Other projects under the fund include the Second Niger Bridge and the Abuja-Kaduna-Kano Highway

On Thursday, Mr. Fashola confirmed all three projects are expected to be delivered in the first quarter of 2022.

“As I speak to you now, we have lost essentially the prime of our working period which is the dry season in the Covid period,” he said. “We have to regain and recover all of that.

“We have also lost some of our expected revenue plans. At the time Covid hit Nigeria, we were doing 2.59 percent growth rate. Now we are heading for a recession globally and Nigeria will not be insulated from that.

“We are working on plans to bring the economy back on track.”

Mr Fashola noted that while work was suspended during the coronavirus lockdown, earnest efforts were made to resume once the federal government started to lift restrictions.

Some 11 contractors executing 53 projects in 26 states, were “remobilised back to site in the first week of the easing of the lockdown,” Fashola said.

“We had to work with the Governor to allow men and materials to move,” he added. “We also had to develop new safety guidelines for the construction.”

Assessing the efforts of the Buhari administration over five years on improving road infrastructure across the country, Fashola said much had been done with very little.

“Given the circumstances and the results, we have done a lot much more with less resources,” he said.

He cited refunds – near N700bn – made by the federal government to states for federal road projects worked on since 1999.

“These are debts that the previous government handed over at the time oil was selling at over $100 per barrel,” Fashola said.

“Those roads were neglected then. These governments have inherited them at the time when revenues have dropped significantly, sometimes to as low as $20 per barrel.

“With much less resources, we have committed to more radical infrastructure development across Nigeria. So as I speak to you now, we are executing 600 road projects across all the states.

“We are in universities repairing internal roads that have been left behind.

“The Abuja-Kaduna highway is under construction, so is the Bodo-Bonny bridge. Second Niger-Bridge and the Lagos-Ibadan expressway.

“What is the impact? Although we haven’t finished, any road user today will tell you that their journey times have been improved, compared to when we resumed on the major highways.”

In 2020, the federal government recovered $308m looted by military dictator, Sani Abacha, and pledged it towards the construction of three key infrastructure projects – the Lagos-Ibadan Expressway, Abuja-Kano Expressway and the Second Niger bridge.

But Fashola explained that the funds are not domiciled in the Ministry of Works. Instead, the funds was paid into the Sovereign Wealth Fund, managed by the Nigeria Sovereign Investment Authority (NSIA), Fashola said.

“I can’t confirm whether the money is ready because it didn’t come to my ministry,” he said. “It was released to the Nigerian government through the Central Bank and I believe on to the NSIA.

“So what happens simply is that the contractor does his work. Our staff, from the controller to the directors at the ministry, provide technical governance to make sure that the work is properly done, certified, and then we send the certificate that we validate to the NSIA.

“The NSIA also have their own technical consultants who crosscheck; and if they are satisfied, they pay.

“That is how we have done it in the past 18 months and these funds, when they come in, if they come in, will not change the governance process.

“And there are plans by the Attorney-General to also expand the governance process and oversight for it. What we are concerned about is making money work for Nigerians,” the Minister said. 

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