…approve change of lender for $17bn railway modernisation

By Levinus Nwabughiogu-Abuja 

A Bill seeking to create framework for the regulation of franchising and to guide the relationship between franchisors and franchisees in Nigeria, yesterday scaled through second reading at the House of Representatives.

The bill which emanated from the Senate for concurrence was sponsored by Senator Adetokunbo Abiru.

Abiru during the debate had emphasized the need to regulate the franchise system in the country in accordance with global best practices, adding that it will improve the economic wellbeing of the country.

Presented before the House at the plenary, the Deputy Majority leader, Hon. Peter Akpatason and Hon. Ossai Nicholas Ossai (PDP, Delta) opposed the Bill, stressing that the content had been taken care of by the Companies and Allied Matters Act (CAMA).

Similarly, the Deputy minority leader, Hon. Toby Okechukwu (PDP, Enugu) demanded that the House be addressed on the economies of the bill.

In his remarks, however, the Speaker Hon. Femi Gbajabiamila told Ossai to provide details of CAMA, providing for franchise agreements to enable the House rescind the motion on the bill.

The Bill was later put to a voice vote and passed for second reading.

In a related development, the House also gave its nod for the change of financier from China Exim Bank to China Development Bank for the Nigerian Railway Modernization Project (Kaduna–Kano segment).

Also approved were the conditions which included the type of loan, the maturity of 15 years, interest rate of 2.7%, commitment fee 0.4% and upfront fee 0.5%.

It will be recalled that both chambers of the National Assembly had on 5 March 2020 and 2 June 2020 respectively approved the $22.7 billion External Borrowing (Rolling) Plan.

The motion for the for the modification of the $22.7 billion 2016–2018 Federal Government External Borrowing (Rolling) Plan was moved by the Chairman, Rules and Business of the House, Hon. Hassan Fulata (APC, Jigawa). 

Fulata while moving the motion said that China Development Bank has been approved as the financier to fund the project with $17 billion following the withdrawal of China Exim Bank due to the impact of COVID-19.

He said: “The National Assembly approved the sum of $22,798,446,773 (twenty–two billion, seven hundred and ninety–eight million, four hundred and forty–six thousand, seven hundred and seventy–three United States Dollars) only under the 2016–2018 Medium Term External Borrowing (Rolling) plan. Aware of the Communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal for the Nigerian Railway Modernization Project (Kaduna–Kano segment) occasioned by the COVID–19 Pandemic whereof China Exim Bank withdrew its support to finance the project.

“To secure funds for the project, the Contractor (CCECC Nigeria Limited) in collaboration with the Federal Ministry of Transportation engaged China Development Bank (CDB) 

as the new financier in the sum of $973,474,971.38 (nine hundred and seventy-three billion, four hundred and seventy-four million, nine hundred and seventy-one thousand and thirty-eight United States Dollars) only.”

But hardly had Fulata finished moving the motion when Hon. Ossai Nicholas Ossai (PDP, Delta) opposed the motion, demanding the copies of the agreements to enable the lawmakers read it.

“We are changing from China Exim Bank to China Development bank that means addition of another agreement. If we are going to pass that resolution. That means the members of this house won’t see those agreement. The Minister of Finance should come with agreement as agreed with development bank of china so that members can be guided when approving such a loan”, he said.

In his reaction, Speaker Femi Gbajabiamila asked him if he had spoken with the Chairman Aides and Loans about it to which Ossai answered in the affirmative included writing to the ministry of finance.

Exercising his discretion on the matter Gbajabiamila put the motion to a voice vote.

It however received the support of the House and was adopted.

The speaker later directed that the Chairmen of Aides and Loans and Land Transport should see him in his office later to address the issues raised by Ossai.