Nigeria: Running The Government On External Borrowing

By  Suleiman Umar

With the signing into Law of the N10. tn  2019 , budgetary provision, which had returned Nigerian, into the January-December Budget cycle,  budget expenditure by President Muhammadu Buhari, on Tuesday , December, 17, 2019, not many had expected him to drop the plan of the still pushing for the external borrowing  of $ 29.96 bn. They got it wrong.

This is because the Katsina state born Nigerian President is desperate to secure  the foreign loan , which he believes  would facilitate the execution of key projects  in the country’s mining , power,  agriculture, health and educational sectors of the economy.

The  President was said to have  made the first move to get the 8th National Assembly led by Bukola Saraki, a former governor of Kwara state to approve the request  in 2016 but was not lucky. It was said to have been  turned down by the Senate as Saraki  was said to have used his political clout to force the Senators who under his control to reject it.

The Senators may not have wanted to play into Buhari’s hand  in order to get their  Constituency allowance vote as they were said to have approved part of the  2016 -2018  external borrowing package which  Nigerian could access in the Paris Club, regarded  in the international Community as the foreign Creditor.

 The  failure of the Saraki led 8th  National Assembly to approve the entire N29.96 loan package, according to  Ahmad Lawan, the Borno state born Politician and the Senate President  stalled the  execution of the key projects planned in the minining, power, agriculture , health and educational sectors of the  economy  in the first term of the Buhari admiration.

The Saraki led 8th Senate were said to have approved  only the government’s  emergency  projects in the crisis thorn  north eastern states of Adamawa, Borno, Taraba and Yobe states, particular, and one China  Assisted  Railway  Modernisation  projects  for Lagos-Ibadan segment. The project s still on-going.

It was not surprising why there was jubilation in the All Progressive Congress, APC,  camps  that  Saraki and the other APC  Senators who rebelled against the party  to team up   with the opposition People’s Democratic Law makers to go against  the  party decision to installed its Candidates as the National Assembly leaders  could not win their  re-election bid  into the  9th Senate in their respective states. The Statement by Adams Oshiomhole, a former governor of Edo state and National Chairman of the Party  over the loss of Dino Meleaye  to  Smart Adeyemi, an ace  photo Journalist from Kogi state in the rerun Senatorial election in Kogi state speaks volume.

 He may have spoken the mind of the President  when he said’’ Thank God , that Melaye, the last of the   Saraki  loyalties  in the 8thSenator who were making things  difficult  for the President actualization of his electioneering Campaign promises  through prompt approval of the yearly budgets and executive bills awaiting to pack his bag and baggage  out of the Hallowed Chamber have  finally lost the election.  Oshiomhole  was happy that the era of delaying passage of budgets and the President executive bills is over.

Zaina Ahmed: Minister of Finance, Budge and National Planning

 The revisits of the $29.96bn  external borrowing request by the President in 2016 by the Lawan led National Assembly bear eloquent testimony to the APC Chieftains happiness  that  Saraki and his group could not make it to the Senate to avoid a repeat  of what happened in Buhari first term in office where there  many  unfulfilled promises, particular, provision of  basic infrastructural facilities to the people. The President may have heaved a sigh of relief  when he was  assured by the 9th National Assembly leadership that there was  no cause for  alarm  over the passage of the  Executive bill on external borrowing  for the 2016-2018 period  by the 9th National Assembly leadership.  This is because the  APC  National Assembly leadership could easily hold closed door meeting  with the President on any  Executive Bill before it is introduced  to both Chambers for discussion.

This may have informed why the APC Law makers could  could use their majority in the National Assembly to pass   Executive  Bills  without  worrying about the opposition  PDP. The recent passage of the  29.9 bn  external borrowing  Resolution  speaks volume. The Opposition PDP had raised alarm  over its implication to the  country’s economy, describing it as an’’endless  borrowing’’, but that was how far they could go.

As a prelude to the passage of the Executive Bill , Lawan, the 9th National Assembly Senate President  was said to have read out a letter to his Colleagues  that in pursuant  to section 21  and 27 of the Debt Management Office, DMO Act,  ‘’I hereby  request  for Resolutions  of the Senate  to approve  the government’s 20-2018  external borrowing plan as well relevant projects to be executed under the plan.

Given an insider information  why the Executive Bill  on external borrowing was rejected by the 8th National Assembly, Lawan had blamed it  on the inability of the Presidency  and then Economic Management Team, led by Yemi Osbajo, a Professor  and Vice President , to provide the relevant  details on the plan for the Foreign. Loan.

The Presidency and the Presidential Avisory Council, PAC,  may have gone back to the drawing the  drawing the provide the details , which may have informed  why Lawan , moblised  his Colleagues to pass  the Resolution for   the government  to go  ahead  and make use of the window provided by Creditor nations in 2016 2018, as a worthy creditor borrow.  The country may have been given the opportunity to borrow  by the Creditor  nations as an oil producing country.

 Shehu Sani, a member of the 8th National Assembly, who  was the Chairman of the Senate Committee on Local and  External borrowing   as at 2016, may have differed  with Lawan, over the reason for rejection of the Executive bill.

Sani had said that the Committee had recommended  to the Committee of the whole  Senate to reject the Executive bill on the  external borrowing of $29.9 bn request of Buhar to’’ save the country  from sinking  into the dark gully of a perpetual debt trap’’. An aggrieved Sani  disclosed that the  Committee did  not want the country to be recognised  by creditor Banks .

Going by DMO records ,  the country’s external debt  as at 2015, when Buhari, assumed power,  was a manageable  $10.32 bn but the figure was said to have increased  to about $22.0 bn in the second quarter of 2016.  But with the Senate approval of $29.bn  external borrowing for 2016-2018,there are fears in both official and unofficial circles that the external debt profile of the country mat hit $52bn bracket , which financial experts believe are not sustainable  because of the country’s weak economy.

Many believe that Nigeria is heading towards becoming like the Latin American countries, particular, Venezuela, an oil producing country, which is caught in the web of  external borrowing that  had distablised its economy.  The questions on the lips of most people is : Why are these creditor nations targeting the oil producing countries in Latin America and Africa?

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