The Senate, yesterday, approved President Muhammadu Buhari’s request for fresh loans totalling over $16.23 billion and €1.02 billion. Also approved was the grant component of $125 million.
These approvals come less than 24 hours after the World Bank Group raised an alarm over “massive gaps in debt-tracking systems” in poor countries, especially those in sub-Saharan Africa (SSA), including Nigeria, and called for a more transparent debt management process, as reported by Sustainable Economy.
The loans are being funded by the World Bank, African Development Bank (AfDB), and the French Development Agency (AFD).
Ironically, as part of the policy recommendations based on the findings of the World Bank’s new Debt Transparency in Developing Economies report, creditors and international finance institutions were advised to be guided by the G20 Operational Guidelines for Sustainable Financing.
The new loan requests were included in an addendum to the 2018-2020 borrowing plan submitted by the President in September.
The Committee observes that these projects, some of which require additional financing, will have a great multiplier effect on stimulating economic growth through infrastructure development, job creation, poverty alleviation, healthcare and improve our security architecture.
Presenting the report on Wednesday, the Chairman, Senate Committee on Local and Foreign Debts, Clifford Ordia, explained that the funds are meant for ongoing projects in the 2018-2020 borrowing plan.
Ordia said: “It will be recalled that the senate at plenary in July 2021 approved financing for projects as recommended by the Committee above whilst the Committee continued further legislative action and consideration of the outstanding request.
“Subsequently, on the 15th of September 2021, the President of the Senate of the federal republic of Nigeria read another Communication from the President and Commander in Chief of the Armed Forces, Containing an addendum to the 2018-2020 External Borrowing (Rolling) Plan in the sum of $4,054,476,863, €710,000,000 and Grant Component of $125,000,000 for various projects and same was also referred to the committee for further legislative action.
“The Committee notes that a good number of the projects in respect of which financing is being requested under the 2018-2020 external borrowing (rolling) plan are mostly ongoing projects and programmes in respect of which externally borrowed funds have been spent in the past, including loans and grants.
“The Committee found as a fact that out of a sum of over $22.8billion approved by the national assembly under the 2016-2018 external borrowing rolling plan, only $2.8billion, that is, 10% has been disbursed to Nigeria.
“The committee observes that these projects, some of which require additional financing, will have a great multiplier effect on stimulating economic growth through infrastructure development, job creation, poverty alleviation, healthcare and improve our security architecture.”