Senate’s rejection of $30bn loan request

tHE Senate, on Tuesday, turned down the request by President Muhammadu Buhari for a $29.96 billion loan to finance key projects between 2016 and 2018. The Senate premised its rejection of the request on the failure of the President to avail it of detailed information of what the executive intended to do with the loan. Senate Leader, Ali Ndume, who addressed the press after the plenary, noted that the request failed on technical grounds. He said, “One of the technical things that was missing there is that, even if you read the letter, it said ‘attached is a draft’ but there was no attachment.”

The Senate should be applauded for this bold move to keep the executive on its toes and assert its independence. It is crystal clear that there is paucity of profundity in the various tiers of government. Serious matters are handled with levity and simple matters are allowed to compound into serious crisis. The result of this is the hard life that the majority of Nigerians are subjected to. Sending such a request to the National Assembly without attaching necessary documentation suggests that the executive either believes the National Assembly is pliant and will do its bidding willy-nilly, or it is ignorant of the procedure. While the former should never be contemplated because of its debilitating effect on the polity, the latter is not excusable because the executive is an institution and institutions are built on processes and procedures. It should be clear to all that it would be unconstitutional for the National Assembly to even consider the request without an explanation of how the expected loans would be deployed.

We agree with the Senate on this issue. We insist that the executive must come up with a detailed breakdown of what it intends to do with the money sought not just “the total cost of the projects and programmes under the borrowing plan is $29.960 billion 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” as contained in the documents sent to the National Assembly. This will enable the legislators to carry out due diligence on the request and position them to make informed decisions on it.

We also need to stress that the President and his economic team should come up with a detailed economic policy. It is saddening and regrettable that after almost one and a half years in office, the present Federal Government has yet to present any economic road map to Nigerians. This is why the economy appears to be at a standstill. This is why various sectors in the economy are finding it difficult to thrive. What we have had so far is a knee jerk approach to managing the economy. The government has become reflexive rather than reflective in steering the ship of the economy; hence the economy seems to be permanently in the reverse gear.

According to media reports, the failure of government to come up with an economic blueprint has constituted an albatross to its quest to access facilities from both the World Bank and the International Monetary Fund. The Breton Woods institutions have tied the release of any loan to Nigeria to the production of a comprehensive economic blueprint, which would enable them to assess the performance of the economy as well as its ability to repay facilities extended to it. The import of this is that coming up with a detailed economic outline is not just sine qua non for the recovery of the economy, it is also a plinth on which the government’s effort to raise external loans rests.

A well-researched economic policy will save the government from the unjustifiable desperation for seeking humongous external loans. It will show what the government needs to do to raise money locally and what it should do to curb wastage. With such a document, it will be glaring to the government that plunging the country into a $30 billion debt, which is about half of Nigeria’s debt since its independence in 1960, is a disservice to the nation’s future generations and is neither desirable nor defensible. A document like that will show to the government that hoping to pay back the huge debt with earnings from tolls on roads and train fares is illusionary.

Seeking to develop the economy without a road map is putting the cart before the horse and those who put the cart before the horse always get stuck.