Lawmakers Okay Governments Borrowing Spree

The House of Representatives yesterday approved plans by state governments and the federal government to borrow $7.9 billion from international creditors after what seemed like initial disapproval by the lawmakers on the grounds that it will lead the nation into debt trap.

In a surprising twist, the lawmakers capitulated on their earlier stand and approved the borrowings which will see state governments borrow $3.39 billion and the Federal government $4.8 billion.

States that are benefitting from the borrowing are Kaduna, Kano, Lagos, Borno, Ondo, Adamawa, Nasarawa, Cross River, Abia, Anambra, Ebonyi, Enugu, Imo, Edo, Kebbi, Katsina, Osun, Niger, Kwara, Bauchi, Jigawa, Sokoto, Gombe and Ekiti.

 The House yesterday adopted the report of its Committee on Aids, Loans and Debt Management chaired by Rep. Adeyinka Ajayi which held public hearings on the loans and recommended that the request be okayed.

The committee report recommended the approval of the loans which are for the so-called pipeline projects under the Medium Term External Borrowing Plan of 2012 to 2014.

But the House removed Yobe State and the Federal Capital Territory Authority (FCTA) among the beneficiaries because of their failure to appear before the committee to explain why they needed the funds.

This means the FCT lost its bid to borrow $500 million for the Abuja Light Rail Project from the Exim Bank of China.

The House approval came just a week after the Nigerian Governors Forum decided to press the lawmakers to approve the loans package following indications that the National Assembly was not keen at it.

Lawmakers had expressed skepticism on the borrowing plan, with some of them accusing President Jonathan of leading the nation into debt trap.

Government officials defended the borrowing, saying the loans are tied to specific Federal and state projects, with long-term moratorium and low interest rates.