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President Muhammadu Buhari has
asked the National Assembly to approve
two external loans worth $ 5 .5 billion.
But the terms and conditions for such
facilities are not made known. According
to Buhari in a letter read by Senate
President, Bukola Saraki, during a
plenary session yesterday , the first loan
of $ 2 . 5 billion is for the financing of the
deficit and capital projects in the 2017
budget . The second loan of $ 3 .0 billion
is for the refinancing of maturing
domestic debt obligations through the
issuance of Eurobonds or a loan
syndication.
The president informed the legislators
that the terms and conditions of the
loans would only be known when they
are ready for collection .“ With respect to
the terms and conditions of the
proposed external borrowings, the
Senate may wish to note that being
market- based transactions , the terms
and conditions of the borrowings can
only be determined at the point of
issuance of finalisation based on
prevailing market conditions in the
International Capital Market (l .C .M . ),”
he declared .
The request generated an initial
controversy on the floor of the Senate as
the lawmakers protested against the
earlier impression that the request had
been pending before the Senate and
that its delay in approving it had caused
a major hitch in the implementation of
the budget .
Justifying his loan request of $ 2 .5
billion, President Buhari invited the
Senate to “ note that in order to
implement the external borrowing
approved by the National Assembly in
the 2017 Appropriation Act, the Federal
Government issued a $ 3 OO million
Diaspora Bond in the International
Capital Market (ICM ) in June 2017 .The
balance of the 2017 external borrowing,
in the sum $ 3 . 2 billion is planned to be
partially sourced from issuance in the
ICM of $ 2 . 5 billion through Eurobonds
or a combination of Eurobonds and
Diaspora Bonds, while $ 700 million is
proposed to be raised from multilateral
sources.
“ It should be noted that the intention is
to issue the Eurobonds first, with the
objective of raising all the funds
through Eurobonds , and that Diaspora
Bonds will only be issued where the full
amount cannot be raised through
Eurobonds.”
He listed the projects as the Mambilla
Hydropower Project ; construction of a
second runway at the Nnamdi Azikiwe
International Airport ; counterpart
funding for rail projects and the
construction of the Bode- Bonny Road ,
with a bridge across the Opobo
Channel .”
On the $ 3 billion for the re - financing of
domestic debts , the president said : “ In
addition to the implementation of the
external borrowing approved in the
2017 Appropriation Act, in order to
reduce debt service levels and lengthen
the tenor profile of the debt stock , the
Federal Government seeks to substitute
maturing domestic debt with less
expensive long - term external debt. ”
According to him, the Federal
Government plans to source $ 3 .0 billion
through the issuance of Eurobonds as
approved by the Federal Executive
Council at its meeting of August 9 ,
2017. Listing what he believed could be
the benefits of the loan, Buhari stated
that the proposed re - financing of
domestic debt through external debt
would achieve more stability in the debt
stock while also creating more
borrowing space in the domestic market
for the private sector.
He drew the attention of the Senate to
the fact that in the 2017 Appropriation
Act, debt service at N1 .663 trillion
represents 32 . 73 per cent of the
government’ s total expenditure , which
makes it important to take urgent steps
to reduce debt service costs .
At another forum yesterday , Buhari
announced that funds recovered from
treasury looters would be deployed into
the financing of the budget . It was ,
however, not clear if the National
Assembly has given approval for the use
of the funds, but President Buhari who
made the announcement in Abuja said
the decision on that had been taken .
Buhari, who spoke at the 22 nd Annual
Conference of Certified National
Accountants under the auspices of the
Association of National Accountants of
Nigeria (ANAN ) said his administration
was aiming at 10 ,000 megawatts power
generation by 2020, stressing that
“ power generation has peaked to an all-
time high of 7 , 001 megawatts in the
third quarter of 2017 . ”
Represented by the Accountant - General
of the Federation , Alhaji Ahmed Idris,
Buhari expressed happiness that “ a firm
implementation of the Treasury Single
Account (TSA ) since September 2015 has
significantly enhanced transparency in
the Federal Government’s Public
Financial Management System .”
Also yesterday , the Senate passed the
N152 billion 2017 budget of the Federal
Inland Revenue Service
(FIRS). Approving the report of its
Committee on Finance , the Senate
approved N 75 .8 billion as personnel
cost indicating 49 .58 percent, N46
billion for overhead indicating 30 . 09
percent and N31 billion indicating 20 .33
percent.
The personnel budget of the agency
increased from N 51 .8 billion in 2016 , to
N75 . 8 billion. “ This is due to the
planned recruitment of 700 additional
staff in 2017 and salary review by 30
per cent subject to approval by Salary ,
Wages and Income Commission ,” the
report read .The FIRS has projected
revenue of N 4 . 9 trillion in its 2017
budget .
The lawmakers also approved
N270 . 5 billion 2017 budget of the
Nigeria Ports Authority (NPA ) which has
a projected revenue of N 288 .7 billion in
the same year. This is in addition to the
approval of a N161 . 9 billion for the
Nigerian Maritime Administration and
Safety Agency (NIMASA) with a
projected revenue of N 161 .9 billion.
Saraki said it was necessary for revenue
generating agencies to live up to their
mandates .This , he said , would reduce
the need for borrowing by the Federal
Government, adding that the Senate
would do its part to ensure that the
agencies live up to expectations. He also
expressed concerns about the extra-
budgetary expenditures made by some
revenue generating agencies .
But the lawmakers put on hold the 2017
capital budget expenditure of the
National Automotive Design and
Development Council over allegation of
irregularities. They threatened to arrest
the council ’ s Director - General , Alhaji
Aminu Jalal, for allegedly evading
briefing the committee on trade and
investment on the budget performance.
This legislative decision was taken
sequel to the report submitted by Sam
Egwu, the chairman , Committee on
Trade and Investment where he
reported that the agency failed to
credibly state its budget performance
for 2017.
Saraki said the DG should stop further
expenditure on the 2017 capital budget
until he clears with the committee , but
to continue to spend the recurrent
expenditure for staff salaries .
In the House of Representatives , the Ad
hoc Committee Investigating Revenue
Leakages in the Department of
Petroleum Resources (DPR ) and other
subsidiaries of the Nigerian National
Petroleum Corporation (NNPC) has
begun the scrutiny of Duke Oil and its
alleged non - remittance of over N6
trillion revenue . Duke Oil, it was learnt ,
is a subsidiary of NNPC .
Addressing members of the committee
yesterday , the panel chairman , Jarigbe
Agom Jarigbe (PDP , Cross River ), stated
that the probe would cover January
2016 to 2017 and would be predicated
on the apparent inability of the DPR to
enforce compliance with remittances
into the Consolidated Revenue Fund
(CRF ).
The committee also resolved to , among
other things, ascertain the actual
quantity of crude lifted by Duke Oil,
number of special products such as fuel
oil (LPFO ), naphtha, condensate, liquid
natural gas, pentane plus and liquefied
petroleum gas (LPG) on which they are
supposed to pay royalties .
According to Jarigbe, the committee
would further look at the composition of
the board of Duke Oil to ascertain who
the directors are and why it was
registered in Panama while its head
office is in the United Kingdom, while
doing business in Nigeria.
The panel members , Jarigbe said , would
in the process establish why the firm
has been unable to pay taxes to the
Federal Government and why it has also
not published its audited accounts since
inception.
Jarigbe said prior meetings between the
panel leadership and DPR in the office
of the House Speaker Yakubu Dogara
revealed that the DPR has been helpless
in ensuring that revenues are remitted
into government coffers.
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