THE Senate Committee on Foreign and Domestic Debt has described ‎grossly illegal, what it called current efforts by some states in the northern part of the country to secure loan from the Saudi Arabia-based Islamic Bank in disregard with Nigeria’s extant laws.
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In a statement signed by the Chairman of the committee, Senator Shehu Sani, yesterday in Abuja, it was pointed out that the extant laws required any government or agency of government that wants to secure a foreign loan to first secure the support of the Federal Government pointing out that the governors cannot just go to Saudi Arabia to solicit or collect loans without ‎following the due process of law.

He said: “The action of the governors ran contrary to the relevant provisions of the Act that clearly and unambiguously rest the exclusive right to borrow externally on the federal government.

“The Debt management office Act 2003, section 21 and external borrowing guidelines, 2008-2012, paragraph 2.1 clearly states that any government or its agencies can only obtain external loan through the federal government and such loans must be supported by the federal government guarantee. The act is explicitly clear that no state, local government or federal agency shall on its own borrow externally.

“Governors of the northern states cannot just jet out to Saudi Arabia to solicit or collect loans without following the due process of law. The law further states that state governments and their agencies wishing to obtain external loans shall obtain federal government approval in principle from the federal Ministry of Finance. This is the provision of paragraph 2:2 (II) of the external borrowing guidelines‎” Sani added.

The lawmaker who did not mention the name of any of the northern governors, further explained that “In addition to the above, paragraph 2.2 (v) of the same guideline succinctly declares that all external borrowing proposals of the governments and their agencies for the next fiscal year must be submitted not later than 90 days preceding the year to the minister of finance for incorporation into the public sector external borrowing programme for the coming year.’’