PDP kicks as Senate gives accelerated approval to Buhari’s N850bn loan request

Without any voice of dissent, the Senate Tuesday gave accelerated approval to the N850 billion fresh loan request forwarded to it by President Muhammadu Buhari.

Approval for the loan which is to be sourced from the domestic capital market was given in less than five minutes after the request was read to senators by Senate President Ahmad Lawan at the plenary session.

To achieve the immediate approval of the president’s request, the Senate suspended Order One of its standing rule which stipulates that such request be referred to the relevant committee for thorough parliamentary deliberation.

 President Buhari had in a letter to the Senate President, stated that: “To ensure that there are adequate funds to finance critical projects and programmes in the 2020 budget, I hereby seek the Senate’s approval by resolution to raise the N850 billion of new external borrowing in naira from the domestic capital market instead of from the international capital market”.

 Buhari lamented the federal government’s inability to seek the loan from the international capital market, which according to him, would have been more beneficial.

 He drew the attention of the Senate to provisions in the 2020 National Budget which empowered government to raise the loan to fund the capital budget.

“The Senate may wish to recall that the 2020 Appropriation Act provided for N1,594,986,700,544 of new domestic borrowing and N850 billion of new external borrowing.

These borrowings were to part finance the 2020 budget deficit of 2,175,197,885,232 only.” Buhari stated.

 He stated that although “external borrowing from the international capital market increases Nigeria’s external reserves, provides access to lower costs as well as avoids crowding out private sector borrowers who also wish to access the domestic capital market, recent developments in the global economic environment as a result of the coronavirus pandemic and the decline n international oil prices have made it less attractive to borrow from the international capital markets at this time.”

 “However, it remains our intention to access the international capital market when conditions improve to refinance this N850 billion of new borrowing and epitomise the benefits inherent in external borrowing,” the president added.

According to him, “the conditions in the domestic capital market are favourable in terms of availability of funds and relatively low interest rates. This cause of action is deemed prudent given our current realities.”

 Buhari informed the Senate that he had “directed the Minister of Finance, Budget and National Planning to make herself available to provide any additional information or clarification which you may require.”

 Improved COVID-19 coordination

In a related development, the Senate Tuesday sought for better coordination amongst stakeholders across the three tiers of government in the fight against coronavirus pandemic and distribution of palliatives to Nigerians.

The upper legislative chamber specifically charged the executive arm of government to set up a national technical committee on COVID-19 made of relevant scientists and health professionals, both at home and abroad.

It said: “The committee should be charged with the responsibility of developing national strategic response to the pandemic including the detailed epidemiology of the disease in Nigeria, the development or production of rapid testing kits, effective therapy and prevention mechanism, etc.”

These resolutions were sequel to a motion, “COVID-19 pandemic: Reviewing the national responses to the challenges and the way forward” jointly sponsored by the Majority Leader, Yahaya Abdullahi (APC Kebbi North) and the Minority Leader, Enyinnaya Abaribe (PDP Abia South) and co-sponsored by five other lawmakers during  plenary.

The Senate further urged the executive to articulate a coherent and coordinated exit strategy from the lockdown through a phased opening of the economic and social spheres of the nation without compromising the safety of the citizens and ensuring that there was no increase in the rate of the infection.

It also called on the Presidential Task Force, PTF and state governors to embark on massive mobilisation, education and enlightenment of Nigerians on the reality of the pandemic and means of protecting themselves, their families and communities from contacting and spreading the virus.

The upper legislative chamber further urged the executive to fast track the submission of the revised Medium Term Expenditure Framework (MTEF), Fiscal Strategy Paper (FSP) and the 2020 budget to the National Assembly for consideration and passage.

It specifically advised the Presidency to use “this grim period to change the trajectory and structure of the Nigerian economy by appropriating at least 10 percent of the growth domestic product, GDP as stimulus package for investment” into the key sectors of the economy.

The sectors as stated were those of the health and education infrastructure, agriculture, solid minerals, renewable energy, petroleum industry, infrastructure and public works like roads, railways, harbours, waterways, etc and investment on science and technology.

Leading debate on the motion, senator expressed worry that “despite all actions by the PTF and the National Centre for Disease Control (NCDC) the cases of COVID-19 has continued to rise in Nigeria with community transmission now happening and becoming a major threat to people’s lives.”

The Senate Leader was also worried that “from one state and one case on Thursday, 27th February, as at Sunday, 26th April, 2020, (eight weeks later), 32 states plus FCT now have cases of COVID-19 with total cases of 1,273; 239 discharged and 40 deaths representing three percent case fatality rate.”

He listed challenges with the management of the situation in Nigeria to include shortage of extraction and testing kits, non-uniform treatment, limited resources to support the states at point of care, limited information to guide distribution of medical products, low stocks of essential supplies, poor coordination of response between the federal and state governments and poor utilisation of available human and manufacturing capacities.

Abdullahi also lamented that “the massive disruption of the world economy caused by the pandemic has its direct effect on Nigeria in the form of the collapse of crude oil price and subsequent drop in the revenue sources like value added tax, VAT, taxes, custom duties due to local and international lockdowns.”

He noted the inconvenience the lockdown order by the federal and many state governments put on Nigerians and commended them for their cooperation and patience in view of the limitations of the various palliatives provided by the government, private sector and individuals during the restrictions.

Contributing, Senator Abaribe said the federal government needed to look into the solution to the problem because “Nigerians have been so patient with us even though the pandemic case came from outside the country.”

In his own, Deputy Senate President Ovie Omo-Agege raised concerns over the agitation by Nigerians for the cancellation of the lockdown despite its effects on the economy, saying staying alive safely should be the major priority.

Chairman of the Senate Committee on Primary Health and Communicable Diseases, Chukwuka Utazi, stressed the need to strengthen the NCDC, noting that it had “shown capacity that it can do better.”

PDP kicks

But the Peoples Democratic Party (PDP) has expressed concerns over the approval of the N850billion by the Senate.

In a statement issued Tuesday, the party’s National Publicity Secretary, Mr. Kola Ologbondiyan said:   “The party is further concerned that the Buhari-led administration had, in its incompetence, failed to articulate tangible wealth creation programmes to buoy our economy, despite the huge natural and human resources at its disposal, but relishes only in accumulating loans, without precise repayment plans, thereby pawning the economy as well as the future of our nation.

 “Nigerians are alarmed that the Buhari administration’s over dependence on loans is wrecking our economy while amassing huge problems for our future generation.”

 “It is even more worrisome that the loans are not transparently managed as most of them are being trailed by allegations of mismanagement and embezzlement.

“The PDP holds that instead of constantly resorting to borrowing, the Federal Government should articulate innovative ways to create wealth and plug wastes.

“What is expected at a time like this is for the Buhari Presidency to immediately cut on luxury, slash the number of Presidential appointees, cut down huge allowances that gulp billions of naira and maintain a lean budget that will center on health, research and growth of our economy among other critical needs.

“The PDP therefore charges the Senate presiding officers to note that in approving this loan, the nation holds them responsible to ensure strict oversight monitoring of the handling of the money.

“This is especially as it is being sourced from the capital market, which hosts investments by private individuals and firms.

“The Senate must ensure judicious use of the funds as well as prompt repayment. This is because our nation cannot afford any default, as such is capable of crippling the capital market and worsening the economic hardship already being faced by Nigerians.

“The PDP therefore urges all stakeholders, particularly fiscal transparency groups, the Nigeria Corporate World and management of the capital market to protect Nigerians by closely monitoring the performance of the loan to guarantee effective management and prompt repayment,” Ologbondiyan said.

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