Lawmakers approve Buhari’s request for loan in the twilight of his tenure
By Jeph Ajobaju, Chief Copy Editor
Federal lawmakers have approved Muhammadu Buhari’s request to borrow $973,474,971.38 from China Development Bank after the China-Exim Bank rejected a $22,798,446,773 loan request the National Assembly (NASS) approved.
House of Representatives Rules and Business Committee Chairman, Abubakar Fulata, moved a motion for the chamber to amend its resolution granting approval for the failed loan deal.
He said: “The House notes that the 2016–2018 Federal Government External Borrowing (Rolling) Plan was approved by the Senate and the House of Representatives on March 5, 2020, and June 2, 2020, respectively.
“The House recalls that the National Assembly approved the sum of $22,798,446,773 only under the 2016–2018 Medium Term External Borrowing (Rolling) plan.
“The House is aware of the communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna–Kano segment) occasioned by the COVID–19 pandemic, whereof China Exim Bank withdrew its support to finance the project.”
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Conditions for loan
“The House is also aware that to secure funds for the project, the contractor (CCECC Nigeria Limited), in collaboration with the Federal Ministry of Transportation, engaged China Development Bank as the new financier in the sum of $973,474,971.38 only,” Fulana said, via reporting by The PUNCH.
Fulata urged the House to “rescind its decision on the financier and harmonised terms and approve the change of financier from China Exim Bank to China Development Bank.” The lawmakers unanimously agreed.
The House also approved the conditions provided in the harmonised term sheet as follows:
- Segment – Kaduna-Zaria-Kano
- Financier – China Development Bank
- Type of loan – commercial loan
- Maturity – 15years
- Currency – euro
- Interest rate – 2.7% + 6 months Euribor
- Commitment fee – 0.4%
- Upfront fee – 0.5%
Treaties, Protocols and Agreements Committee Chairman, Nicholas Ossai, noted the executive arm failed to present to the NASS details of Nigeria’s commercial agreements with other countries.
“Secondly,” he said, “we are now changing from China Exim Bank to China Development Bank, it then means an addition of another agreement. And if we are going to pass this resolution, it then means that members of this honourable House will not see those agreements.
“It is incumbent and important for the Minister of Finance (Budget and National Planning, Zainab Ahmed), when you are coming (to the National Assembly) on these issues to come with the agreements as agreed with the China Development Bank, so that members can be guided when approving such conditions for this loan.
“Mr Speaker, I believe that this motion should be stepped down while we ask the relevant authorities to forward all the agreements as agreed with China Development Bank.”
Speaker Femi Gbajabiamila argued the substantive committees, especially the Committee on Transport, had gone through the details.
But Ossai insisted that it is an external loan with an international commercial agreement, which falls under the jurisdiction of his committee.
“I have also written to the Chairman (of the Committee on) Aids and Loans on this matter. I have also written to the Minister of Finance on this matter,” he added.
Gbajabiamila asked Chairmen of the Committees on Transport as well as Aids and Loans to see him immediately after the session; he put the motion to voice vote and it was unanimously adopted.
The House has kept mum on the alleged abandonment of an investigation of commercial agreements and external borrowings by the government, which the Treaties, Protocols and Agreements Committee said contains “dangerous” clauses.
The committee is yet to lay before the House its report on the botched probe that began in 2020.
