THE PLANNED $22.7 BILLION LOAN REQUEST BY PRESIDENT MUHAMADU BUHARI

On Thursday, March 5, 2020, the Nigerian Senate approved the $22.7 billion (about N8.1 trillion) loan request earlier presented by President Muhamadu Buhari to the eight Senate but was initially stepped down following the outcry from some citizens over the impending danger of the loan to the economy.

As at date, this $22.7b loan has been approved by the Senate but awaits assent by the House of Representatives.

According to several credible news outlets and also based on the recent position taken by the South-East Governors Forum, the South-East has been excluded from the proceeds of or the spending plan proposed for the $22.7bn loan.

Flowing from this, the Onitsha Chamber of Commerce, Industry, Mines and Agriculture expresses great concern over this unconstitutional and inconsiderate act and more grievously, the rising national debt profile and its negative implications on the nation’s economy.

Onitsha Chamber of Commerce wishes to convey its displeasure to the Senate for approving this loan request with fiat when some South-Eastern caucus members were expressing their dissatisfaction over the opaque nature of handling the whole loan deal process and its refusal to exhaustively debate it in the red chambers.

Although the government has listed various infrastructural projects the proposed loan is tied to, we, however, affirm that its distribution lends credence to the lopsidedness and the marginalization cry of most South-Easterners since the advent of this administration.

The exclusion of South-East in the mainstream projects outlined for execution leaves so much to be desired since about 35 projects listed to be executed cut across different sectors of the economy, with infrastructure given the top-notch.  

It is no longer news that there is a massive infrastructural deficit in the South-East which is enough to warrant that major projects should be listed for execution in the zone.

Moreso, while so many infrastructural projects have been initiated, executed and commissioned in other parts of the country, the very few insignificant Federal projects in the South-East are still under construction since the last five years with no hope of completion.

This calls for worry and overtly supports if not validate the ante of marginalization that has upped in the South-East in recent years.

Since it is the resources of Nigeria, in taxes and particularly oil, of which a substantial portion comes from the South-East that will be used to repay the loan, excluding the South East can best be described as sacrilegious.

Moreover, many people of good conscience have pointed out that section 162(1) of the Constitution provides that “The Federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja”.

As can be seen; loans are not one of the ‘proceeds’ exempted from the Federation account as the same constitution defined “revenue” in Section 162(10) by stating that, “For the purpose of subsection (1) of this section, “revenue” means any income or return accruing to or derived by the Government of the Federation from any source and includes- (a) any receipt, however, described, arising from the operation of any law…”.

From the above, ‘loans’ comfortably fall under the category of ‘any source’ or ‘any receipt, howsoever described.’

Further, Section 162(3) of the same constitution provides that “any amount standing to the credit of the Federation Account shall be distributed among the Federal and state governments and the local government councils in each state on such terms and in such manner as may be prescribed by the National Assembly”.

This simply means that loans are not excluded from amounts or monies ‘standing to the credit of the Federation Account’.

We recall that the South-East Region was excluded from the first Chinese loan for the railway corridor, which runs from Port Harcourt to Maiduguri and from the South-South through North Central to the North East which was over $5 Billion.

We, therefore, urge the Federal government to suspend the use of the proceeds for the listed projects until there is a review.

The House of Representatives should stand down their assent to this loan and should ideally not entertain its debate on the floor of the house, as is.

The economic funding policies and borrowings should be in line with provisions of the ‘Fiscal Responsibility Act as well as through constitutional provisions in which case the South-East should be fully incorporated in the major projects.

If the Federal Government is fair as regards the infrastructural neglect being suffered in this zone, 50% of that loan should be used in the South-East.

Since every part of the country must repay the loan, every part of the country must benefit from its proceeds.

Chinedu Nwonu
Vice President, Public Relations

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