Senators reject Jonathan’s loan request

…Senators described it as frivolous and an avenue by state governments to loot the treasury.

SENATORS Wednesday rejected a request by President Goodluck Jonathan to borrow $3.702 billion towards development of critical infrastructure in the country.

The Presidency was, however, lucky with the House of Representatives, which said it would approve the request to borrow $4.31 billion as contained in the 2010 outstanding borrowing plan.

President Jonathan, in a letter dated 1st November, 2010, had sought for Senate’s approval for the loan.

The National Assembly had earlier approved $915million of the $5.22billion total loan package for the 2010 Federal Government Borrowing Plan.

Opposing the loan balance request yesterday, many Senators described it as frivolous and an avenue by state governments to loot the treasury.

They specifically faulted the proposals by the Oyo and Taraba State Governments seeking the Senate’s approval to borrow $83 billion for institutional reform and capacity building.

To allow more scrutiny, Senate President David Mark directed the Senate Committees on Finance and National Planning to do more work on the loan request before any approval can be granted.

Mark said: “No country can survive without borrowing, especially when it is soft loan. I think the mean thing is for us to intensify our monitoring. There are other projects here that will benefit our government.”

Senator Lee Maeba, (PDP, Rivers) urged his colleague not to approve it as it will amount to borrowing to serve individual interests rather than national.

Maeba said: “If you look at what some state governments are asking for, I mean $83 billion for institutional reform and capacity building, you can see that this money is going to disappear to somewhere. External borrowing should be for projects with value and not for institutional reform.”

“We are in dilemma if we approve this loan. I object to the borrowing and my stand is that if we insist on borrowing, it should be targeted at project with value.” He added

In the same tone, Senator Umar Hambagda, (ANPP, Borno) maintained that approving such request will amount to returning to old days when there was a drag in national development due to high indebtedness of Nigeria to foreign countries.

“A debtor is a slave. The person you borrow from is your master. Borrowing led us to crisis, our domestic debt is about $29 billion and we still want to borrow again. By the time we start spending borrowed money without result, there will be problem.” He stated

The Senate Committees on Finance and National Planning are expected to scrutinize the request and report back in the next one week.

The House of Representatives mandated its joint committee on Aids, Loans and Debt Management and Finance to study and recommend the term, conditions and sum for each of the items contained in the External Borrowing Plan submitted to the House by President Goodluck Jonathan.

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