Senate rejects El-Rufai’s $350m World Bank loan



The Senate, yesterday, rejected the request of a $350million World Bank loan by the Kaduna state government for the Development Policy Operation (DPO) of the state.

The rejection followed the recommendation of the Senate Committee on Local and Foreign Debts, chaired by Senator Shehu Sani (APC, Kaduna Central), who presented report of the committee during plenary in Abuja.

Similarly, the three senators from the state, including the committee chairman; Senator Suleiman Hunkuyi (APC Kaduna North) and Senator Danjuma Lah (PDP Kaduna South) also kicked against approval of the loan.

Senator Sani, while presenting the report, said, “the committee recommends that the Senate do reject the request of USD350 million for Kaduna state as contained in the 2015 2018 External Borrowing (Rolling) Plan of Mr. President, Commander-in-Chief of the Armed Forces.”

According to the committee, if the loan is approved, it will make the state the second most indebted in the country.

The chairman stated that the loan obtained by the state from 1960 till now was $232 million, adding that if approved, the additional $350 million will state.

He also told the meeting that police had deployed 3,000 personnel to protect both teachers and students in public schools.

state’s debt stock to $582.1 million.

“Based on the submissions and interactions with the invited government officials,” the committee observed that “the Development Policy Operation, DPO (Budget Support) of USD 350 million for Kaduna state was approved by World Bank in 2016 and captured in 2016 – 2018 borrowing plan as approved by the National Assembly.”

Sani further explained that the credit facility has an attractive low financing data of 1.25 per cent interest; moratorium of five years and a 25-year maturity tenor, adding that “the facility is already captured in the 2016-2018 Medium Term Expenditure Framework (MTEF).”

The committee chairman also informed that Kaduna state has a total debt stock of USD232.1 million, according to the latest Debt Management Office (DMO) figures.

He therefore maintained that “if this loan request is approved, the new total debt stock of USD582.1 million for Kaduna state will be unsustainable and necessarily attract huge financial burden on the meager federal allocation to the state”.

“With the new borrowing, the debt service to revenue ratio of Kaduna state will further be increased and thus impact negatively on the ability of the state to meet other basic needs of its people.

“The new debt stock will likely, further erode the economic viability the North-east, was aimed at ensuring maximum security of the schools.

According           to        him, the

He further affirmed that “with the high total debt stock of Kaduna state at the moment, the new borrowing sought, will make the debt service to revenue ratio high, thereby worsening the state government’s ability to meet its other basic obligations to the people and further erode the economic viability of the state.”

Sani, however, expressed the committee’s gratitude to the Senate President Bukola Saraki, the leadership and membership of the upper legislative chamber for the confidence reposed in him and his members to carry out the assignment.

Concurring, Senators Hunkuyi and Lah noted that it was needless to grant the loan because due process for obtaining the facility was not followed by the state government.

According to Hunkuyi, the loan is a misplacement of priority because the projects intended to be achieved were not stated, and that stakeholders were not consulted as precondition for the loan from the World Bank.

Also, Senator La’ah kicked against the loan request, saying his people had not mandated him to support the credit facility.

Deputy Senate Leader, Senator Bala Ibn Na’Allah (APC, Kebbi South), described the rejection as a lesson for democracy, especially governors who refused to consult with their people and representatives before seeking such massive loan approval.

No tags for this post.

Be the first to comment

Leave a Reply

Your email address will not be published.


*