Be prudent with public funds, Lawan tasks MDAs

President of the Senate, Ahmad Lawan, has advised Ministries, Departments and Agencies of the Federal Government to be prudent with the management of public funds entrusted to them.

He gave the admonition in his concluding remarks shortly after the Senate approved President Muhammadu Buhari’s request for the authorisation of N2.343 trillion ($6.183 billion USD) as External Borrowing in the 2021 Appropriation Act.

He called on relevant committees of the Senate to be alive to their oversight functions and not entertain frivolous spending by the MDAs.

He said: “Our committees should be alert on how the funds that will be borrowed will be used.

“No frivolous expenditures should be entertained. I imagine that everybody in the trust of public funds, especially these laws will be as prudent and economical as possible.”

Earlier while submitting his report Senator representing Edo Central and Chairman of the Senate Committee on Local and Foreign Debts, Clifford Ordia, expressed concerns over the level of sustainability and servicing of Nigeria’s external borrowing.

He noted that “due to the shortfall in our annual revenues in relation to our need for rapid infrastructural and human capital development, we had to pass deficit budget every year requiring us to borrow to finance the deficit in our budget.”

Senator Ordia disclosed that the loans would be sourced from multilateral and bilateral lenders through the issuance of Eurobonds in the International Capital Market.

He emphasized that the proceeds of the USD$6.183 would be used to fund various specific capital projects specifically from priority sectors of the economy namely; Power, Transportation, Agriculture, and Rural Development, Education, Health, Provision of counterpart funding for Multilateral and Bilateral Projects, Defense and Water Resources.

The lawmaker disclosed that the final terms and conditions – the interest rate and tenors in the case of Eurobonds – can only be determined at the point of issuance of the Bonds in the International Capital Market and would be subject to market conditions prevailing at the time of issuance.

He added that the Primary listing of the Bond will be on the London Stock Exchange while the Secondary Listing will be on the Nigerians Stock Exchange and Financial Markets Dealers Quotations (FMDQ) Securities Exchange.

Ordia observed that “multilateral and bilateral institutions operate on standard terms and conditions and Nigeria secures the best terms and conditions within the context of the market.”

Accordingly, the Senate while adopting the resolutions of the Committee on Local and Foreign Debt approved the issuance of $3 billion USD but not more than $6,183,081,643.40 Eurobond in the International Capital Market for the implementation of the new External Borrowing of N2,343,387,942,848, for the financing of part of the deficit authorized in the 2021 Appropriation Act.

It also approved that the amount authorised may be raised from multiple sources such as the International Capital Market and any other Multilateral or Bilateral sources as may be available.

In addition, the upper chamber directed the Minister of Finance, Budget and National Planning, the Director-General of the Debt Management Office and the Governor of the Central Bank of Nigeria to submit to the National Assembly within ten working days (excluding the day of the close of trading) a letter containing the United States Dollars amount so raised and received as a result of the approval together with the applicable exchange rate.

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