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Reps approve Buhari’s loan request

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President Muhammadu Buhari

The House of Representatives on Tuesday approved the loan request by President Muhammadu Buhari.

The House Committee on Aids, Loans and Debt Management, had presented its report through the Chairman, Rep. Ahmed Safana (APC-Katsina) at the House Committee on Supply.

Safana observed that out of the total borrowing of $22,898,446,773 as contained in the October 2019 re-forwarded request of President Muhammadu Buhari, a sum of $17,065,496,773 is for funds proposed to be borrowed from China Eximbank Bank.

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He said out of the $22.799 billion loans, China Eximbank is to provide a larger chunk of the fund worth $17.066 billion at 20 years maturity, 7 years moratorium, 0.5 percent management fee, 2.75 percent interest rate, 0.3 percent commitment fee, and 3-7 years duration.

The lawmaker said that the World Bank is to provide $2.854 billion at average repayment maturity of between 20 – 25 years, 1.25 percent interest rate, 0.25 percent commitment charge, 0.25 percent front-end fee, and five years duration.

He said that the African Development Bank (AfDB), is to provide $1.889 billion at average repayment maturity of 20 years, 0.75 percent service charge, 0.5 percent commitment charge, 5 years grace period, 1.127 percent interest rate and 5-8 years duration.

According to him, Agency Francaise de Development (AFD) is to provide $480 million at 15-20 years maturity, 4-7 years grace period, 2.6 – 2.9 percent rate in USD based on Libor floating market rates (1.3 percent in Euros in Euribomarket rates) depending on loan maturity, 0.5 percent commitment fee, 0.5 percent appraisal fee and five years duration.

The Rep said that JICA is to provide $200 million at 30 years maturity, 10 years grace period, and a 1.4 percent interest rate.

He said German Development Bank is to provide $200 million at 15 years maturity, 5 years grace period, a 3.99 percent interest rate, a 0.25 percent commitment fee of the undisturbed amount, and a 0.4 percent management fee of the loan.

He also said that the Islamic Development Bank is to provide $110 million at average repayment maturity of between 25 years, Service Charge not exceeding 2 percent, 2.5 percent interest rate, and four years duration.

The breakdown of the approved loans includes, $350 million World Bank Development Policy Operation loan for Kaduna and $110 million Islamic Development Bank Health Systems Projects Loan for Katsina State.

Reacting to the adopted report, the Deputy Minority Leader, Rep. Toby Okechukwu said that the approval does not meet the expectations of the people down south.

“First and foremost, there are certain strategic projects that ought to be there, one is the Western Corridor Rail line, which goes from Lagos to Kano and the Eastern Corridor Rail line that goes from Port Harcourt through Enugu to Makurdi, Plateau down to Maiduguri.

“They were established the same day, they commenced the same day, and they were completed the same day they were operating.

“So to take one in exclusion of the other is not appropriate,” he said.

According to him, it is an infrastructural sufficiency to give impetus to the eastern corridor passing through South-South, South East, North Central, and North East.

“If you check all these areas, what you will see is that we have trouble from Boko Haram to agitations to militancy; we have challenges in these areas and when you don’t undertake economic activities that will improve it, you are not helping.

“So it is our considered opinion that they should have been a priority; we appreciate the effort of Mr. Speaker in terms of trying by all means for the past 4 months to accommodate these Lines but of course there was no initiation for it.

“This is where you find out that the budget or loan approval is as good, but we need to think globally,” he said.

Okechukwu, however, appreciated the provision that says that the southeast should be prioritised in the next borrowing plan.

He said that loan approval should have waited until the feasibility study is completed so that the South East and North East are sufficiently accommodated.

The Rep said that the North East and South East in the budgetary appropriation always come last, saying that the house should have considered the region.

 

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