FG To Break $30BN Loan into Tranches
There are indications that President Muhammadu Buhari will now break his pro-posed $30 billion foreign loan plan into three tranches for easy accessibility and possible approval by the Senate.
This is as the president will on December 14 present the 2017 Budget to the National Assembly and address the parliament on the way out of recession.
After the vehement resistance from the Senate, the president decided to have a rethink along the views of majority of Nigerians, who felt that he had no reason whatsoever to borrow such huge amount of money at once and put the nation into perpetual debt.
A source close to the Presidency told our correspondent that Buhari had concluded plans to break the loan into three tranches so that it could be utilised in stages, to enable the economy to absorb the fund meaningfully and be able to yield tangible results.
The source, who preferred to speak on the condition of anonymity, stated that looking at the present state of the economy, the proposed loan was too big to be utilised in one fiscal year, saying that the Senate was right in rejecting the initiative.
The source said: “One of the ministers, who is my close friend has told me that they want to break the loan into three or four tranches because $30 billion is so huge amount that our economy cannot absorb it in one fiscal year.
“When they break it as they are now planning to do, you will find out that it will be easier to be applied for meaningful infrastructural development and other services rather than taking the huge lump sum and then be tempted to waste, misapply or misappropriate it.
“Taking the loan in tranches will also make it easier for the National Assembly to carry out effective and result oriented oversight on the use of the fund because government must be accountable to the people in whatever it is doing since democracy is the government of the people.
“I am also optimistic that when the executive arm becomes reasonable, more responsive and responsible in its policy decisions, the National Assembly will also give it a corresponding support because governance is a collective responsibility.
“However, the parliamentarians, being the representatives of the people, have more work to do to protect the interest of the people from any anti-people proposals of the executive arm, and that is why I am happy about what the Senate has done.”
A principal of the Senate also confirmed the plan to break the loan into tranches. The Senate had, on Tuesday, November 1, thrown out Buhari’s request for National Assembly to grant him approval to obtain $30 billion foreign loan, principally for infrastructural development.
The legislators rejected the borrowing proposal because Buhari did not attach details of the borrowing plan, which the president claimed that he attached to his letter to the apex legislative assembly. Since then, there has not been any further communication from the president to the National Assembly in respect of the loan.
Buhari had, in his letter to the Senate, requested the lawmakers to grant him anticipatory approval, by authorizing him to borrow the money before considering the details of the funds, even without the details of the borrowing, spending and repayment plans.
But disappointedly, the Senate turned down the request and insisted that it would only consider the request when the necessary details had been attached to guide its decision on the matter.
The Senate argued that it has no constitutional powers to grant such anticipatory approval as requested by the president thereby compelling the president to resort to the tranches arrangement as being touted. It is not yet certain if the Senate will agree to approve the touted tranches borrowing plan by Buhari or whether the Chamber will also reject it out rightly.