The Punch Gbajabiamila, group oppose Jonathan’s $1bn loan request The Minority Leader of the House of Representatives, Mr. Femi Gbajabiamila, on Sunday opposed the decision of President Goodluck Jonathan to seek $1bn in external loan to intensify the war against Boko Haram insurgency. Also, the Centre for Social Justice has faulted the request, saying the request was against the provision of the Fiscal Responsibility Act which authorizes borrowing only for capital expenditure and human development. The President, in a letter he sent to the National Assembly on Wednesday last week, said the money would be used to upgrade the equipment of the Armed Forces and train personnel. But Gbajabiamila, who is also the caucus leader of the All Progressives Congress in the House, argued that taking more loans would create additional economic problems for the country in the future. Rather than ask for cash, the lawmaker advised the President to exchange crude oil for military hardware. In the alternative, he suggested that the Federal Government should withdraw money from its “illegal” Excess Crude Account to equip the military and train the personnel. Gbajabiamila said, “The Federal Government, by setting an illegal (budget) benchmark, has been creaming off about $30 per barrel of our crude oil sales, which it puts in an illegal excess crude account. “If it insists on cash, it should reach into that illegal account. Again, it also set up the Sovereign Wealth Fund, a component of which it described as future generation account. “Well, Madam Minister (Ngozi Okonjo-Iweala), the Chibok girls represent the future generation; go into that account if you must, assuming the National Assembly will allow that. “But, to incur a further $1bn loan at whatever interest rate, that is one loan too many for our future generation to pay off and the answer is a capital no!” He proposed further, “I personally do not think any more cash should pass through government at this time. If indeed more money is needed for the training of our men and women in uniform, which I doubt, then we should resort to the time tested trade by barter approach. “The Al Yamamah arms deal between the Saudis and United Kingdom wherein a large amount of British military hardware was sold to the Saudi government for 600,000 barrels of crude oil a day comes to mind. So does the oil for arms deal between China and Venezuela and the deal struck by the US in 2011 when over 80 F15 fighter jets were sold to the Royal Saudi Airforce. The deal included training, logistics and maintenance.” Gbajabiamila, in a statement by his research aide, Mr. Wasiu Olanrewaju-Smart, in Abuja, added that the government had not convinced Nigerians on how its spent the N3tn voted for defence in the last three years. He strongly advised his colleagues in the National Assembly to approach the President’s request with caution and suggested some steps to be taken before the request was considered. These, include, “A comprehensive audit of what has happened to all the money allocated by the National Assembly to defence in the last three years. “What was the amount of debt forgiveness or forbearance given to Mohammed Abacha? That amount if any must be stacked against the loan sought to determine whether granting same makes any sense. “It was reported that government had set up a forensic audit to investigate the alleged missing $20bn from government coffers. This is in spite of the fact that the finance minister, whilst disputing the quantum of the money admitted, she could not account for 10bn. Where are we with the investigation?” These and others, he said, were questions begging for answer and the National Assembly must get clear answers to them before even considering the request not to talk of rejecting it. The CSJ in a statement issued by its Lead Director, Mr. Eze Onyekwere, said such borrowing should be on concessional terms with low interest rate and with a reasonably long amortisation period. It said, “The FRA authorizes borrowing only for capital expenditure and human development provided that such borrowing shall be on concessional terms with low interest rate and with a reasonably long amortisation period. “The request for approval is required to present the cost benefit analysis of the loan detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied. “The specific source of the loan and the interest rate attached to the loan are not disclosed. Essentially, it is not known whether the loan will be concessional which according to the FRA means a loan at not more than three per cent interest rate per annum.”
Posted on: Mon, 21 Jul 2014 06:35:51 +0000
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