The Nation Newspaper

Tag: foreign loans

  • Reps to probe TCN over $2b foreign loans

    Reps to probe TCN over $2b foreign loans

    The House of Representatives will investigate $2 billion foreign loans which the state-owned Transmission Company of Nigeria (TCN) may have raised without official approval.

    The investigation could be a blow to efforts to improve Nigeria’s creaking power infrastructure, which is often blamed for hobbling growth in Africa’s largest economy.

    The Federal Government privatised most of its power sector in 2013 but retained control of the dilapidated monopoly grid operator,  TCN.

    A member of the House, Hon Simon Arabo, said in a motion that the TCN had borrowed $1.5 billion from the World Bank and other international lenders without securing the approval of the National Assembly as required by the law.

    He described the grid operator’s contract processes as opaque and may have violated procurement laws.

    Arabo did not name the other lenders but said TCN is currently negotiating another loan of $500 million with the Islamic Development Bank (IDB).

    Lawmakers agreed to investigate the activities of the TCN over the past 10 years in respect of foreign loans and contract awards and to report their findings within eight weeks.

    A TCN spokesman did not immediately reply to a message seeking comment neither did the World Bank.

    Reuters was unable to reach the IDB for comments outside of normal business hours by a telephone number and email address listed on its website.

    The ailing power infrastructure means blackouts are common across Africa’s most populous country, forcing many businesses and households to run costly fuel generators. If the country’s power plants were to operate at full tilt, the fragile transmission network would not be able to handle the load.

    President Muhammadu Buhari has pledged to increase power capacity exponentially during his four-year term and to meet the demands of Nigeria’s more than 180 million people entirely within a decade.

  • Reps, ministry battle over $200m foreign loans to states

    Reps, ministry battle over $200m foreign loans to states

    THE House of Representatives Committee on Aid, Loans and Debt Management yesterday warned the Federal Ministry of Finance about its allocation of $200 million for foreign loan requests from states.

    Members of the Adeyinka Ajayi-led committee said the ministry cannot peg loan request at $200 million as it is the responsibility of the  House to scrutinise and approve such requests.

    The Ministry of Finance, represented by a deputy director, Benson Odaura, had insisted that the French Development Agency component of the foreign borrowing plan had a total ceiling of $200 million.

    According to him, the development agencies must deal directly with the ministry and not the states.

    The ministry, he said, would determine how much each of the four states will get from the $200 million.

    But the committee said it has the mandate of the House to scrutinise foreign loans process by states, adding that there are a parameters to fulfil in line with the Fiscal Responsibility Act.

    “We will not cede that discretion to the Ministry of Finance,” Ajayi said.

    He went on: “The ministry didn’t say they had only four states in the borrowing plan. The issue of states came up during interaction with the French Development Agency component of the borrowing plan . The French Development Agency component as requested by Mr. President is in respect of four states. Those four states are Kano, Enugu, Ogun and Plateau. Now, that agency had $200 million lumped together.

    “In our interaction with them, each state made presentation on their requests as a component of the $200 million. And in computing, we realised that we will exceed the $200 million going by the request of the states. So, we needed the ministry to explain what it is going to do. But what we said was that we were not going to cede that discretion to the ministry.”

    Another member of the committee, Jones Onyeriere said the Ministry of Finance “is being mischievous”.

    “They can’t come here with an omnibus proposal. Loans are given on request from  states,” he said.

    During the presentation, Ogun State requested approval for a foreign loan of $350 million. However, the committee was not happy with the state presentation, saying it did not match projects to funding.

    Commissioner for Budget and Planning Adenrele Adeshina defended the government, saying there will be a risk of misrepresentation, if she told the committee “here today that we are going to do ABC with the funds”.

    She came with her Finance counterpart Adewale Oshinowo.

    Plateau State Commissioner for Ministry of Water Resources and Energy David Jaafarn Wayep said the state is asking for $50 million.

    He said the state has the ability to pay the loan.

    According to him, the state’s Internally Generated Revenue (IGR) has moved from N500 million to N1 billion.

    Ondo State Deputy Governor Agboola Ajayi, who represented the governor, explained that as a new government, they “met a lot of huge debts and liabilities” and are asking for $57 million loan, which, he said, translated to N17.3 billion at N305 per dollar.

    The loans, according to him, has a 20-year maturity, with seven-year grace period.

    The chairman of the committee stressed the fact that all applications for foreign loans from states must meet requirements of sections 44 and 44 (2) of the Fiscal Responsibility Act.

  • Reps read riot act to ministry over $200m foreign loans allocation

    Reps read riot act to ministry over $200m foreign loans allocation

    The House of Representatives Committee on Aids, Loans and Debt Management Wednesday read the riot Acts to the Federal Ministry of Finance over its allocation of $200 million for foreign Loans requests from the State Governments.

    Members of the Hon.  Adeyinka Ajayi- headed Committee were livid that the Ministry insisted that the loan request had been pegged to $200 million in spite of the fact that the House had the mandate to scrutinize and approve such requests.

    Trouble started when the Ministry of Finance, represented by a Deputy Director, Benson Odaura insisted that the French Development Agency component of the foreign borrowing plan has a total ceiling of $200 million. According to him, the development agencies must deal directly with the Ministry and not the states.

    The Ministry, he also said, would determine how much each of the four states would get from the $200 million approved.

    But the committee said they had the mandate of the House to scrutinize the foreign loans process by state governments, adding that there are a number of parameters they must fulfill in line with the Fiscal Responsibility Act, but under the oversight of the committee. ” We will not cede that discretion to the Ministry of Finance,” Ajayi vowed.

    His words: “The ministry didn’t say they had only four states in the borrowing plan. The issue of states came up during the interaction with the French development Agency component of the borrowing plan . The French Development Agency Component as requested by Mr. President is in respect of four states. Those four states are Kano, Enugu, Ogun and Plateau State. Now. That agency had the sum of 200 million dollars lumped together.

    “In our interaction with respective states, each state made presentation to their own requests as a component of the $200 million. And in computing, we realized that we will exceed the $200 million going by the request of the states. So we needed the Ministry to explain what it’s going to do. But what we said was that we were not going to cede that discretion to the ministry.

    Another member of the committee, Hon. Jones Onyeriere said the Ministry of Finance “is being mischievous. They can’t come here with an omnibus proposal. Loans are given on request by the states,” he said.

    However, during the presentation, the Ogun State government requested for approval for a foreign loan of $350 million. However, the committee was not happy with their presentation saying it did not match projects to funding

    Ogun State Commissioner for Budget and Planning Adenrele Adeshina however, stoutly defended the government saying there will be a risk of misrepresentation if she told the committee “here today we are going to do ABC with the funds. It’s more representative  of the part of the engagement that we are . We have separate programmes and they decide where they want to support us. It’s a work in progress.” She came with her Finace counterpart, Adewale Oshinowo.

    Engr. David Jaafarn Wayep Commissioner, Ministry of Water Resources and Energy, Plateau State said the state is asking for $50 million and that Plateau State has the ability to pay the loan being requested.

    According to him, the Internally Generated Revenue of the state has moved from N500 million Naira to 1 billion Naira hence it should not be a problem for the state to pay . He said the State Government have done a lot of work on its financial management.

    The Deputy Governor of Ondo State, Hon. Agboola Ajayi who represented the Governor explained that as a new government they “met a lot of huge debts and liabilities” and hence were asking for $57 million loan which he said translated to N17.3 billion at 305 per dollar

    The loans, according to him, has a 20 years maturity, with 7-year grace period.

    The chairman of the committee, Adeyinka Ajayi (APC Osun) stressed the fact that all applications for foreign loans from state governments must meet the requirements of section 44 and 44 (2) of the fiscal responsibility act.

  • FEC okays $400m foreign loans for Lagos, Rivers, Osun, Ogun, others

    FEC okays $400m foreign loans for Lagos, Rivers, Osun, Ogun, others

    The Federal Executive Council (FEC) yesterday approved over $400 million infrastrutural projects in Lagos, Rivers, Osun and Ogun states.

    The Minister of State for Finance, Bashir Yuguda, and Minister of Aviation, Osita Chidoka, broke the news to State House correspondents at the end of FEC meeting chaired by Vice-President Namadi Sambo.

    Lagos will obtain $100 million loan from the French Development Agency in support of the Lagos Integrated Urban Development Project (Eko-UP), to improve the living conditions of the most vulnerable urban population of metropolitan Lagos, improve management and treatment of solid waste, strengthen the capacity of Lagos State and implement urban development projects in the state.

    Rivers State, he said, would get African Development Bank (AfDB) $200 million loan for the proposed Port Harcourt water supply and sanitation project and an African Development Fund (ADF) credit of $5million to support Urban Water Sector Reform Project to provide sustainable access to safe drinking water and sanitation to the residents of the city.

    He said Ogun State would obtain $33.174million credit from the French Development Agency for the Ogun State Water supply project to increase the coverage, continuity and quality of service in the state capital, increase the financial viability of existing water utility through increase in revenue collection, providing financing to rehabilitate and build infrastructure needed to increase access to water supply services in the state capital.

    For Osun State, the Minister said that FEC approved an Islamic Development Bank Loan of $65 million – under the Manufacturing/Financing (IStisna’a) – to finance water supply and sanitation projects.

    Other loans approved by the FEC, according to Yuguda, include the Multi-Donor credits from the International Bank for Reconstruction and Development of World Bank, Africa Development Bank, Germany and French Development Agency, are $500 million, $450 million, $200 million and $130 million.

    “The loans total about $1.45billion and is for the establishment of the proposed Development Bank of Nigeria,” he said

    He said a $70 million loan from the International Development Association was approved by the Council for the proposed Africa Higher education Centre of Excellence project, which is meant to build on the efforts made under the previous World Bank Assisted science and technology education school projects.

    He also said FEC approved the President’s anticipatory approval to obtain additional  $140million credit from the international Development Association for the community and social development project being implemented in the 36 states and the Federal Capital Territory (FCT).

    “There was also the ratification of the President’s anticipatory approval to obtain $70 million credit facility, associated grants of $15million and $0.48 million in support of the climate change adaptation and agribusiness support programme from International Fund for Agricultural Development. The programme is to be implemented in Borno, Jigawa, Katsina, Kebbi, Sokoto, Yobe and Zamfara states for six years,” he added.

    He however dismissed reporters’ curiosity over the loans to states controlled by the opposition All Progressives Congress (APC) so close to the general elections, adding that the gesture should not be seen as Greek gifts.