House: Protest Stalls Debate on Foreign Loans
From Onwuka Nzeshi in Abuja, 10.19.2010

Protests by lawmakers opposed to the Federal Government’s 2010 External Borrowing Plan yesterday forced the House of Representatives to suspend consideration of the proposal to secure a $4.43 billion loan.

The loans which are being offered by some multilateral financial institutions were meant to fund some critical development projects in the country, but a lot of legislators kicked against it because of the general fear that such borrowings will eventually take the country back to the old era where the economy was weighed down by a huge debt portfolio.

The proposal for the loan was shut down just as the House elected to postpone the debate on the general principles of the Bill for an Act to Alter the Provisions of the 1999 Constitution and the Second Amendment Act, No. 5, 2010.
The suspension of the consideration of the Constitution Amendment Bill followed a discovery midway into the session that the legislators have not been provided with copies of the recently amended Constitution as gazetted by the National Assembly. The debate has been rescheduled to hold tomorrow.

President Goodluck Jonathan had a week ago written to the two chambers of the National Assembly seeking their approval for the borrowing plan which is segmented into three board categories namely Negotiated Projects, Appraised Projects and Pipeline Projects.
Under Section 19 of the Nigerian Constitution, the parliament is empowered to consider and grant the approval and had indeed granted approvals to the first part of the loan during the passage of the 2010 Appropriation Act.

However, some aggrieved lawmakers effectively stalled a motion which sought to mandate the House Committee on Aid, Loans and Debt Management to study the terms and conditions of the External Borrowing Plan as well as the sum of the loan for each of the projects.

House Leader, Honourable Tunde Akogun who moved the motion for the External Borrowing Plan to be assigned to the Committee on Aid, Loans and Debt Management reminded the House of its preliminary approval for the document via its resolution of Thursday April 22, 2010, presented details of the loans and the designated projects earmarked for execution.

Under the plan, the Presidency listed several projects including, the USD$20m HIV/AIDS development project to be executed by the National Agency for the Control of AIDS (NACA); USD$20m Nigeria Energy and Gas Infrastructure Project 1 to be executed by the Power holding Company of Nigeria (PHCN) and the USD$8m Natural Urban Water Sector Reform Projects 1 to be executed by the Federal Ministry of Agriculture and Water Resources in Kaduna, Ogun and Enugu States.

Although, Akogun laid the necessary foundation for the debate in terms of the facts and figures several lawmakers kicked against the motion. Honourable Terngu Tsegba (PDP Benue ) demanded for more details of the proposed loans and the designated projects. Tsegba observed that it was curious that several financial institutions were offering to lend to Nigeria at this period of her history and warned the parliament to be wary of these gesture as they could become economic traps to put Nigeria back under the bondage of foreign creditors.

Some of the lawmakers criticised some of the projects for which the loans were being sought and demanded that the parliament ought to scrutinise every detail to ensure that it did not grant a request that will mortgage the economy and the future of Nigeria and her citizens.

However, Chairman of the House Committee on Finance, Honourable John Enoh explained that given the state of the Nigerian economy, especially the dwindling resources and deficit in basic infrastructure the country had no choice but to borrow to supplement its revenue.

In the last two years, Enoh said, the country’s portfolio of loans has increased by forty per cent (40%) while her external reserve has dropped by fifty per cent (50%). According to him, the country’s foreign loans have hit over $4billion while her domestic loans amount to about $16billion. He also disclosed that some of these loans will become handy if the Federal Government is to address deficit of about N1.9trillion in the 2010 Appropriation Act.

In the midst of this sharp division and the subsequent clarifications made by some lawmakers in support of the motion, Speaker of the House, Honourable Dimeji Bankole put the question on the motion but was disappointed when the voice vote indicated that majority of the lawmakers will not even permit the External Borrowing Plan to be sent to the relevant committee of the House for its scrutiny and advice.

Sensing that many of the lawmakers that voted against the motion did not fully understand the implications, Bankole ruled that the motion be stood down to allow for more consultations.