The Senate Wednesday approved President Muhammadu Buhari’s loan requests for the sum of $16,230,077,718 (USD) billion and €1,020,000,000 billion (Euros) under the 2018-2020 External Borrowing plan.
Also approved was a grant component of $125 million (USD) and the request to the Bank of Industries for the issuance of €500 million (Euros) but not more than €750 million Eurobond in the International Capital Market.
Of the total loan components, lender agencies from China would give $11, 874,402,442.
The chamber’s approval of the loan requests was, however, accompanied by a resolution that the terms and conditions of the loans from the funding agencies be forwarded to the National Assembly prior to its execution for approval and proper documentation.
The approval followed the consideration of a report by the Committee on Local and Foreign Debts on the proposed 2018-2020 External Borrowing (Rolling) Plan.
In his presentation, Chairman of the committee, Senator Clifford Ordia (PDP, Edo Central), said President Buhari’s request was in compliance with the provisions of the Debt Management Office (Establishment) Act 2003 and the Fiscal Responsibility Act 2007.
According to the lawmaker, the provisions of the statutes enjoined the president to seek and obtain the approval of the National Assembly in respect of the External Borrowing Programme of the Federation and States.
Giving the breakdown, Ordia said the sum of $3,529,300,000 billion would be sourced from the World Bank; $5,078,441,252 billion from China EximBank; $3,902,267,260 billion from Industrial & Commercial Bank of China; $2,893,693,930 billion from China Development Bank; and $698,500,000 million from the Africa Development Bank (AfDB).
In addition, he stated that €345,000,000 million is expected to be sourced from the French Development Agency (AFD); €175,000,000 million euros from the European Investment Bank; $190,255,276 million USD from European ECA/KfW/IPEX/AFC; €500,000,000 from the International Capital Market; and $62,120,000 USD from Standard Chartered Bank/SINOCURE.
In reaching the decision, Senator Ordia said the committee noted the serious concerns of Nigerians about the level and sustainability of the country’s borrowing in the last decade.
Ordia said Nigeria’s debt figures which continued to increase, reached an all-time high of around 95 percent of retained revenue and 35 percent of its annual expenditure.
He expressed concern that the development constitutes a drain on the nation’s economy and limits resources available for national development.
Underscoring the need for a more proactive approach to revenue enhancement, the lawmaker observed that “there are noticeable improvements in our revenues but the growth is not sufficient or rapid enough to catch up with the pace of development required for our nation.”
He disclosed that out of the sum of over $22.8 billion approved by the National Assembly under the 2016-2018 External Borrowing Plan, only $2.8 billion – an amount representing ten percent – has been disbursed to Nigeria.
The lawmaker stressed that the projects, which required additional financing, would have great multiplier effect on stimulating economic growth through infrastructure development, job creation, poverty alleviation, healthcare and improve the nation’s security architecture.
He emphasised that tax revenues accruable to the government would increase as a result of the impact of commercial and engineering activities.
Buhari assures on FDI
Meanwhile, President Buhari has said the outlook of the Nigerian economy remains bright with sustained investments in infrastructure, particularly ICT, that favours global businesses and a friendly regulatory environment that supports Foreign Direct Investments (FDI).
He spoke Wednesday in Paris, France at the Nigeria International Partnership Forum, with focus on “Beyond the Pandemic.”
The president said the Nigerian economy was being re-engineered and re-positioned to be globally more competitive, favouring business and entrepreneurship to drive growth and development.
“For us in Nigeria, lessons drawn from the pandemic prompted us to redouble efforts to mitigate its socio-economic effects. Despite prevailing uncertainties, our equitable and sustainable reform initiatives resulted in substantial economic gains and steady recovery.
“I can assure you that our administration is on the right path to achieving multi-sectoral progress. We have revitalised the economy by increasing investments in capacity building, health, infrastructure, women’s empowerment, climate change, and food security.
“Today, these actions are yielding self-employment, expanding our human resource pool and strengthening our national productivity for sustainable development,” he said.
The president told a gathering of French and Nigerian businessmen that the government recognised the nation’s risk profile and decided to re-assess and update the National Security Strategy in 2019.
“The implementation of this multi-sectoral strategy has contributed to the progress we have made in fighting insurgents and terrorists in the North East of the country. Working closely with international partners, we are firmly addressing the root causes of crimes, and taking measures to prevent and counter violent extremism.
“As I said at the 5th edition of the Future Investment Initiative Summit in Riyadh, Saudi Arabia, investing in humanity is investing in our collective survival. With this in mind, we have incorporated the Public-Private Partnership model into our economic recovery plan, to attract private sector participation in the financing and operations of critical economic and social infrastructure. This measure is already helping to mitigate COVID-19 triggered capital flight and decline in grant and development financing.
“Also, at the just concluded COP26 in Glasgow, I stressed the link between modern infrastructure and the overall economic development of a nation. Hence, the massive infrastructure expansion programme, we have been executing in various sectors since the beginning of this administration. 1.5 trillion Dollars is the cumulative amount estimated to be spent within a period of ten years from 2015.
“So far, we have made significant investments in railways, seaports, roads, renewable energy, housing, and many others attractive to prospective investors. Institutions such as the Nigeria Sovereign Investment Authority and the recently created Infrastructure Corporation of Nigeria run as independent world class institutions to support and facilitate investments in the country,’’ he said.
The president said opportunities in the mining sector had been expanded, with simplified licensing process, extensive investments in transportation of raw materials, equipment and other mining elements by road and by rail.
“To keep the progress in the digital economy, the fastest growing sector in Nigeria in both 2020 and 2021 on track, we recently approved the national policy on Fifth Generation (5G) network.
“Our ultimate goal is to leverage ICT platforms to spur further investments and create jobs, while diversifying support to other emerging sectors. Already, several foreign investors are taking advantage of our recent ranking as the leading start-up ecosystem in Africa.
“Over a week ago, I launched the eNaira, the electronic version of our national currency. When fully operationalised, this innovation will increase participation in fin-tech within Nigeria, increase efficiency in the banking sector, and boost our capacity to combat illicit flow of funds,” he said.
Oil and gas sector
On the oil and gas sector, President Buhari said Nigeria was also getting more attention to expand opportunities with the signing of the Petroleum Industry Act (PIA).
He said: “In the oil and gas sector, I recently signed the Petroleum Industry Act (PIA). The legislation, which is expected to serve as a liberalising force in the industry, introduced incentives such as tax holidays, zero-interest loans, and easy repatriation of profits.
“Our plan is to increase Liquefied Natural Gas exports and expand our domestic market. Partnerships in textile and leather processing, tourism, and health sectors are also areas we can explore,” he said.
On agriculture, the president said through Anchor Borrowers programme, the federal government provided loans and technical support to small holder farmers, leading to the expansion in the number of rice mills in Nigeria from ten in 2014 to forty today.
“The country has also increased the number of active fertilizer blending plants to more than forty-six, from fewer than five in 2014,’’ the president said, “similarly, we have set aside several million hectares of available arable land for agriculture, and have embarked on the creation of Special Agriculture Processing Zones across the country, Buhari said.
Assuring investors of the country’s willingness to create a win-win at every point, he said: “I am proud to reiterate our resolve to reduce and ultimately eliminate obstacles to access and retention of Foreign Direct Investment (FDI). Our investment-friendly policies are backed by the rule of law, practical security policies and a resilient population.
“Let me finally stress that Nigeria is open for partnership and cooperation. I invite the French business community to take advantage of the vast investment opportunities in Africa’s largest economy. As our development partners, rest assured that we will stand together with you throughout our partnership journey to guarantee our mutual interest.”
Also at the event, National Security Adviser to the President Major-General Babagana Monguno (rtd); Nigeria’s Special Envoy on Chad and Lake Chad Basin Ambassador Babagana Kingibe; Minister of Communications and Digital Economy Professor Isa Ali Pantami; Minister of State for Petroleum Resources Timipre Sylva; Minister of Information and Culture Lai Mohammed; and Minister of Foreign Affairs Geoffrey Onyeama also gave an overview on key sectors of the Nigerian economy in separate remarks.
Some business leaders from Nigeria at the event were Founder/Chairman Oriental Energy Resources Mohammed Indimi; Founder/Chairman BUA Group Abdul Samad Rabiu, who also heads France-Nigeria Business Council; Founder/Chairman Zenith Bank Jim Ovia; Chairman of Heirs Holdings and UBA Tony Elumelu; and Chairman/Editor-in-Chief ThisDay Group and Arise News Channel Nduka Obiagbena.
