House asks Yar’Adua to Stop Further Foreign Loans

The House of Represen-tatives yesterday urged President Umaru Musa Yar’Adua to order an immediate halt to further foreign loans until the circumstances leading to Nigeria’s current debt burden of $3.6 billion was made clear to the nation.
The House also mandated its Joint Committee on Justice, Aids, Loans and Debt Management to, as a matter of urgency, investigate under what platform and approval these foreign loans had been sought, processed, drawn, utilised and their relevance to the needs of Nigerians.
These were part of resolutions that emanated from a motion brought to the floor on Nigeria’s feared return to a debtor nation.
The Joint Committee has also been mandated to investigate and ascertain the actual debt owed by the country since 2007 and determine the legality of the loans.
Chairman House Committee on Air Force, Hon. John Halims Agoda, who sponsored the motion, acknowledged that Nigeria’s exit from the burden of foreign debt a few years ago was made possible through the concerted efforts of the Federal Government, the National Ass-embly and some non-governmental organisations (NGOs).
Agoda (PDP Delta), however, expressed worries that soon after that exit, Nigeria’s debt burden had suddenly risen to the tune of $3.6 billion and the funds were being deployed to finance projects of questionable relevance to the populace.
He lamented that the process of securing these loans had not only been shrouded in secrecy but the constitutional imperative that requires the Executive to brief and seek the consent of the National Assembly before sourcing, drawing and utilising foreign loans under whatever description had been breached.
According to him, the Debt Management Act states that when the Executive seeks to borrow money for whatever reason, it should seek the consent of the National Assembly.
The emerging scenario, Agoda said, could worsen the plight of Nigerians who have had to make sacrifices and bear the pains of hunger and underdevelopment, underscored by collapsing and deteriorating public infrastructure in virtually every sector of the economy.
He took exception to media reports that the country secured about $100 million loan to combat malaria, arguing that if loans must be taken, they must be taken following due process and funds deployed in productive sectors that could improve the country’s Gross Domestic Product (GDP).
“The motion before us calls on all of us to see this issue as highly emotive. The issue classifies our nation as a country of contrast distinctions. Are we experiencing policy reversal or policy summersault or have we forgotten our past? By October, Nigeria will be 49. Are we saying that at this stage of our nationhood we should be taking loan to combat malaria? I think that if we must take loans it should be for the productive sectors that could add to our gross domestic product,” he said.
Deputy Chairman, House Committee on Loans and Debt Management, Hon. Friday Itulah (PDP Edo), said what the Federal Government had been doing in respect of foreign loans was a gross violation of the laws of the land.
According to Itulah, the Debt Management Act states that when the Executive seeks to borrow money for whatever reason, it should seek the consent of the National Assembly.
Also supporting the motion, Hon. Samson Osagie (PDP Edo) said the procurement of foreign loans for frivolous reasons and questionable programmes was a direct result of misplacement of priorities.
He lamented that the loans had neither translated to better healthcare facilities nor better road infrastructure in the country, adding that the funds were most likely to be squandered while the projects and programmes for which they were supposedly meant to improve would remain in their deplorable states.
The House unanimously adopted all the prayers of the motion including that the Joint Committee on Justice, Aids, Loans and Debt Management and urged it to conclude its investigations on the debt profile and report back to the House within two weeks.
The House of Represen-tatives had on Wednesday raised an alarm over Nigeria’s rising debt profile, warning that the country was drifting back into debt enslavement in the hands of international financial institutions.
The alarm followed media reports in which the Minister of Finance, Dr. Mansur Muhtar, was said to have put the country’s current portfolio at $3.6 billion.
A member of the House Committee on Debt Manage-ment, Hon. Chukwuma Umeoji, who addressed newsmen on the issue, lamented that whereas the Debt Management Office (DMO) painstakingly extricated Nigeria from the grip of international financial institutions, events in recent times had shown that the country had plunged head on into the debt trap set by developed nations to keep underdeveloped countries perpetually poor.
He warned that if Nigeria continued on the current trend, the country could become one of the most indebted nations in the world by 2020.
The present generation of Nigerians, Umeoji said, appears bent on squandering the available resources and desperately mortgaging the future of the country through theses loans at this period of global economic meltdown.
He alleged that there appears to be more efforts towards negotiating foreign loans due to the selfish interests of those seeking the loans on behalf of government than in paying local debts owed local contractors. According to him, the only way to stimulate the domestic economy if for the Federal Government to release the funds provided in the budget for domestic debt servicing as this will inject liquidity into the system and improve retail economic activities. He warned that Nigerian government should resist the current temptation to be dragged into another round of economic slavery by advanced countries, adding that only prudent management of resources and strict implementation of the budget could save the Nigerian economy.
“Mortgaging the future generation of Nigerians through loans at this period of global economic meltdown is wrong in view of the revenue profile of the nation. What we derive from oil even in the face of the Niger Delta crisis is adequate to move Nigeria forward because it is far above the budget benchmark. There is no argument advanced that will justify this type of debt profile. Nigeria should avoid loans especially at this period of global recession. There is this tendency to lend as a way of helping developing economies. Objectively speaking, loans will perpetually mortgage our economy to the dictates of external forces. The Nigerian economy will never grow if we continue to move in a vicious cycle from a debtor nation to free nation and back to a debtor nation.
“It is difficult to understand the gain in borrowing to finance projects which were provided for in the budget of ministries. The loans at the end of the day will end up being invested in the economies of the countries controlling the lending financial institutions through the importation of equipment, administrative and sundry expenses abroad,” Umeoji said.