With President Muhammadu Buhari’s request for an external debt borrowing plan, the spectre of at least an additional $25 billion to the country’s already fat debt portfolio stares the country in the face.
If the National Assembly gives approval, and the loans are taken, the country’s debt profile is bound to shoot above N32 trillion in the coming years.
Recall that almost exactly three years ago, the Senate unanimously rejected a presidential request to the National Assembly to approve external borrowing plan of $29.960 billion to execute key infrastructural projects across the country between 2016 and 2018.
On Thursday, the President made a similar request in a letter, though he did not state an amount. The letter suggested there is an attached list of projects the borrowing plan is for, but noted that some of the loans for projects had been approved by the former Senate.
The non-attachment of the projects three years ago led to its been thrown out by the Senate.
In November 1, 2016, according to a media report , President Buhari made the requests in two separate letters to the President of the Senate, Bukola Saraki, and Speaker of the House of Representatives, Yakubu Dogara.
But when the request came up for consideration at the Senate, the lawmakers rejected the proposal entirely.
Senate Leader then, Ali Ndume, had asked the Senate to consider the request of the president for the huge loan.
But when the Senate President, Bukola Saraki, put the request to a voice vote, senators responded with a resounding “nay”.
The Senators maintained that position when Saraki put the question the second time.
In his 2016 letter, the President said the external loan, the biggest in Nigeria’s history, will fund targeted projects cutting across all sectors with special emphasis on infrastructure, agriculture, health, education, water supply, growth and employment generation.
Other sectors, he said, included poverty reduction through social safety net programmes and governance and financial management reforms, among others.
According to him, the cost of the projects and programmes under the borrowing (rolling) plan is $29.960 billion.
This is made up of proposed projects and programmes loan of $11.274 billion, special national infrastructure projects $10.686 billion, Euro bonds of $4.5 billion and Federal Government budget support of $3.5 billion.
The opposition Peoples Democratic Party then urged the National Assembly to reject the loan request.
Similarly, lawyer and rights activist, Femi Falana, urged the lawmakers to reject Mr. Buhari’s request, saying it would mortgage future generations of Nigerians.
A year later, the Senate, and subsequently the National Assembly, approved a request for $5.5 billion to execute some projects.
The Senate Leader, Ali Ndume, according to a Premium Times report three years ago, later revealed that the president’s letter had no detailed information about the nearly $30 billion loan bid, even though the letter made reference to an “attached” breakdown in its first paragraph.
This was admitted by the Presidency through the President’s special assistant on the Senate, Mr. Ita Enang, who said the government would work with relevant agencies to collate the needed information.
Speaking on the development then, the Senate spokesperson, Mr. Aliyu Abdullahi, said people entrusted with key responsibilities within the Presidency must do their work.
He noted that there was a line in the letter that read “attached”, but lamented “nothing is attached”.
He blamed the anomaly on officials who were responsible for helping the President on matters of communication.
“This is the reality unfortunately. We have to rethink position given to certain persons and people who are not competent should step aside.
“What is the Chief of Staff doing? What is the SGF doing?
“We have said it that some people are working to set the president against the legislature,” said Abdullahi.
Defending the Senate’s action, the spokesperson said since the president’s letter was not supported by detailed information, the lawmakers had nothing to work with.
Mr. Abdullahi however said “if all these things are addressed, the Senate is more than desirous” to consider the loan authorisation request.
As that time, the country’s debt profile was N16.29 trillion, representing $61.7 billion at N283/$1 exchange rate, according to the Debt Management Office.
According to The Guardian last October, the nation’s debt profile rose from N24.95 trillion to N25.7 trillion in the last three months. One year ago, it was N22.38 trillion.
The development showed that between April and June, the country’s obligations rose by N750 billion, and increased by N3.32 trillion when compared with the debt figures as of June 30, 2018.
Government has, so far, paid more than N800 billion in servicing the multiple obligations, which cut across domestic and foreign deals in the first half of 2019.
Total domestic debts stood at N17.38 trillion, with the Federal Government having more than three-quarters of the stockpile. These include FGN Bonds, N9.69 trillion; Nigerian Treasury bills, N2.65 trillion; Promissory Notes, N708 billion; FGN Sukuk, N200 billion; Nigerian Treasury Bonds, N126 billion; Green Bond, N26 billion; and FGN Savings Bond, N10.4 billion.
On the other hand, the external debt components are made up of multilateral deals worth $12.7 billion; bilateral, $3.3 billion; and commercial, $11.2 billion. Among these external debt obligations, the World Bank Group, China and Eurobond are top creditors, with over $23 billion claims on the country.
On Thursday, the President sought the re- consideration and approval of the National Assembly on the 2016-2018 External Borrowing Plan of the Federal Government.
In it, he wrote: “Pursuant to Section 21 and Section 27 of the Debt Management Office Establishment Act, I hereby request for resolution of the Senate to approve the Federal Government’s 2016 and 2018 external borrowing plan as well as relevant projects under this plan.
“Specifically the Senate is invited to note that while, I had transmitted the 2016-2018 external borrowing plan to the 8th National Assembly in September 2016, this plan was not approved in its entirety by the legislature.
“Only the Federal Government’s emergency projects, for the North-East’s four states projects and one China Exim Bank assisted railway modernisation project for Lagos-Ibadan segment were approved out of a total of 39 projects.
“The outstanding projects in the plan that were not approved by the legislature are nevertheless critical to the delivery of government policies and programmes relating to power, mining, roads agriculture, health, water and educational sectors.
“These outstanding projects are well advanced in terms of their preparation consistent to the 2016 debt analysis undertaken by DMO and were approved by the Federal Executive Council (FEC) in August 2016 under the 2016-2018 external borrowing plan.
“Accordingly, I have attached for your kind consideration, relevant information from the Honourable Minister of Finance Budget and National Planning, the specific outstanding projects under the 2016 -2018 external borrowing plan for which the legislative approval is been sought.
“I have also directed the minister to make herself available to provide any additional information or clarification which you may require to facilitate prompt approval of the outstanding projects under this plan.
“While, hoping that this request will receive the usual expeditious consideration by the Senate, please accept distinguished Senate President, the assurances of my highest consideration,’’ the letter stated.