Senate okays $1.34bn external loans for FG, 14 states
BY BEN AGANDE
ABUJA — The Senate, yesterday, gave approval of $1.348 billion external loans for the Federal Government and 14 states of the federation as part of the 2010 External Borrowing Plan of government.
The approval is short of the initial $3.702 billion requested by the Federal Government.
The balance of the money would, however, be approved when some states which failed to appear before a committee of the Senate do so to defend the need for the loans.
Of the approved amount, the Federal Government’s initial proposal of $152.2 million was slashed by $200,000 while the other 14 states that are beneficiaries of the loan would share $1.19 billion amongst themselves.
While Kaduna State, for instance, had its request for the loan suspended because it had informed the committee that its negotiations with the crediting agencies were still on-going, Lagos State voluntarily backed out of the planned loan of $200 million which it had earlier requested for the growing of enterprises and markets from the International Development Association, IDA, but sustained its $333.8 million request from the French Development Agency.
A breakdown of the loans approved, yesterday, indicated as follows: Oyo, $68 million; Niger, $60 million; Taraba, $15 million; Imo, $60 million; Kebbi, $50 million; Cross River, $50 million; Edo, $50 million; Enugu, $100 million; Lagos, $333.8 million; Abia, $200 million; Adamawa, $50 million; Ondo, $50 million; Plateau, $50 million and Osun, $60 million.
The request by Kano State for a loan did not get the Senate’s approval because the state did not appear before the committee to defend the request for the loans while the request of Ogun State of $33.173 from the FDA was dropped from the list of recommended loans because the figure was yet to be confirmed by the Federal Ministry of Finance,while the same request by Cross River State of $43.918 million for the National Urban Water project and Enugu’s $33.173 million for water sector development were also rejected for the same reasons.
Senator Ahmed Makarfi, who presented the committee’s report which was eventually approved by the Senate, said the loans being sought were in line with Nigeria’s external borrowing guidelines, adding: “The projects to be funded with the proceeds are desirable and will improve the state of infrastructure of benefiting states if properly applied.”
He emphaised that the external debt exposure of the states seeking the loans was within limit and have not contravened the provisions of the Fiscal Responsibility Act 2007.
Makarfi noted that although the facilities were required to bridge the huge infrastructural gaps in all the states, the committee observed and frowned at situations where the lenders proposed to benefiting states the type of projects they should execute with the proceeds of the facilities.
“The committee was of the view that states should utilise the proceeds to execute projects that are self sustaining, and can withstand the test of time as against projects with short life span,” he said.
