Senators Oppose GEJ's $3.702b Foreign Loan Request

ABUJA, Nov 24, (THEWILL) - President Goodluck Jonathan's request for $3.702 billion foreign loan suffered a major setback today on the floor of the Senate.

After an exhaustive debate on the request which has generated controversy in recent times, the Senate mandated its Committee on Finance and National Planning to thoroughly scrutinize the request before approval could be granted.

Most senators who opposed the loan said enough time is required for proper scrutiny of President Jonathan’s loan request. They added that investigations should be carried out on the projects done with the $915 billion earlier approved.

The consideration of the request followed President Jonathan's letter to the Senate requesting the approval of $3.702 billion of the outstanding 2010 external borrowing plan.

Sensing the position of the senators during their contributions, the Senate President, David Mark said there is no nation in the world that says it does not need loan, stressing that the important thing is to utilize the loan very well and monitor the projects executed with the loan.

He pointed out that there are a lot of projects that are valuable to the nation that needs to be encouraged.

"There are areas in the request that are not very clear; I suggest it should be sent to relevant committees for scrutiny. And the committees should come back next week with the areas that are clear so that they can be approved and the areas that are not clear we will invite various ministries to explain," Mark said.

From the request, the Federal Ministry of Power (Power Holding Company of Nigeria) will enjoy $152 million for a period of two years (2009-2011), from a project under Economic and Power Sector Reform Programme. While Lagos, Kaduna, Ogun, Cross River and Enugu will enjoy $150 million for a period of two years (2010-2012) under the National Urban Water Sector Reform Project. Lagos Urban Transport project 11 would gulp $100 million with a project period of two years (2010-2012). Rural Access and Mobility project 11 will gulp $120 million and the beneficiaries will be Enugu and Osun states, while Special intervention for infrastructural development is to take $200 million and the beneficiaries will Edo, Kebbi, Plateau, Adamawa and Ondo states among other beneficiaries cutting across the country.

Contributing while opposing the request, Senator Umaru Hambagda said a debtor is a slave, adding that your creditor is your master.

"Borrowing leads us into crisis and our domestic debt is about $29 billion, we still want to borrow again. By the time we start spending borrowed money without result there will be problem," Hambagda said.

He added that, "government wants to borrow when we have five months to leave government. What is the assurance that we are coming back, if we want to borrow should it be done in August when a new government will be on board soon?”

Opposing the request, Senator Ahmed Lawal said $915 million was approved earlier by the Senate, insisting that the Senate should find out how the approved money was utilized.

"We have somewhat inconclusive stands on this issue. We have to be very careful the way we utilize loans. We have to be given time to study this request to know what we can do," he said.

Supporting the request, Senator Patrick Osakwe said there is nothing wrong with the request, adding that the terms of the loan is like free money and very enticing.

He said: "If you look at the terms of this money it looks like free money. The terms are very enticing. We should grant this request especially when the request explained what it would be used for. The loan is necessary for the true running of this country."

In his contribution while also supporting the request, Senator Nimi Baregha-Amange said the Senate should encourage the Executive to take the loan, as the nation external reserve is dwindling.

"It is important that we take the loan because I look at the loan as a dash. We have a grace period of ten years. There is no way you can develop the nation with what we have. We should encourage the Executive to take the loan."

The Senate however mandated the Committee on Finance and National Planning to scrutinize the request and submit a report next week for further action.