How COVID-19 staved off $22.7 billion foreign loan controversy

Lawmakers, who are also members of the Southeast Caucus in the National Assembly, were not amused recently by the exclusion of the region among the beneficiaries of the $22.7bn foreign loan request by President Muhammadu Buhari. Their concern stems from the fact that the burden of the loan repayment would be shouldered by the entire country while only some sections will benefit from the projects the loan would cover.

It would seem they were caught napping since the loan request was a one. It is baffling why they didn’t ask governments in the region to initiate projects the loan request would cover in the regions. In the 8th Senate, the request was turned down when it was tabled before the red chamber. A former lawmaker, Shehu Sani, explained that they rejected the president’s loan request to save Nigeria from sinking into another debt trap.

Many of the lawmakers from the region never believed the request would see the light of day. But Buhari’s recent letter to the senate explained that the external borrowing plan targets projects cutting across all sectors with special emphasis on infrastructure, agriculture, health, education, water supply, growth and employment generation.

The Southeast Caucus, led by the Senate Minority Leader, Enyinnaya Abaribe, met separately with the Senate President, Ahmad Lawan and Speaker, House of Representatives, Femi Gbajabiamila, behind closed doors to register their grievances just before the National Assembly closed for two weeks over the rampaging Coronavirus pandemic.

But their intervention was almost belated. However, the COVID-19 pandemic might have come at an auspicious time regarding the controversy surrounding President Buhari’s initial plan to take $22.7 foreign loan, with COVIC-19 coming as a leveller of sorts, bringing world powers to their knees, and also changing the mindset of leaders to work towards equity as the fight against the disease is collective.

It was no surprise when the federal government suspended its $22.7 billion external borrowing plan. The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had announced that COVID-19 pandemic had taken its toll on the country’s finances in March 2020. The minister spoke at the 2020 International Conference on the Nigerian Commodities Market organized by the Securities and Exchange Commission (SEC) in Abuja.

She said the decision to jettison the plan was taken “due to current realities in the global economic landscape. The breakout of the deadly coronavirus late last year had completely unsettled the world economy, with the price of crude oil plunging to the lowest level since 2016.”

With the Nigerian economy dependent on oil revenues to finance the budget, the unprecedented crash in oil prices below the approved benchmark price of $57 per barrel had rendered approved estimates in the budget unrealistic. Mrs. Ahmed said the government would not even be keen to proceed with the borrowing plan even if the National Assembly gives the approval for it to go ahead.

“The current market indices do not support any external borrowing at the moment, despite that the parliament is still doing its work on the borrowing plan,” she had said.

The minister said the government would defer the plan and watch the market till when the timing is right. The Senate approved the loan request in controversial circumstances, but the House of Representatives suspended deliberation on it indefinitely. The Southeast senators and Reps members had alleged marginalisation and lopsidedness in the proposed projects in Buhari’s $22.7bn loan plan.

While addressing journalists after their engagements with the presiding officers, a former Deputy Senate President, Ike Ekweremadu, who was with other lawmakers, said the position of his colleagues was that the issue of loan request be revisited since the House of Representatives had yet to approve it.

He said, “We decided that the best approach is constructive engagement with the National Assembly leadership. So this afternoon, we had a very deep conversation with the senate president and also the speaker. Our thinking is that what the federal government presented is a borrowing plan. It is just a plan. There is still an opportunity for us to look at the distribution.

“If we are going to be part and parcel of the payment, it makes every sense that we are going to benefit from the utilisation of those funds. Our concerns were about certain facilities within the eastern corridor railway of Port Harcourt to Maiduguri; we are also concerned about the access to the sea for people of the Southeast to open seaports in our area. We hope by the time the matter is addressed, the fears of the people will be allayed.”

Ekweremadu added that the caucus also protested against the lopsided nature of the National Assembly’s bureaucracy, which, according to him, excluded the Igbo from top management positions.

He said, “From the Clerk of the National Assembly to Deputy Clerk, Clerk of the Senate and the House, the DG of National Institute for Legislative Studies, the Chairman and Secretary National Assembly Service Commission, the same thing with the Public Complaints Commission, the Southeast is excluded.”

It would be recalled that the senate experienced a rancorous session from a heated argument on the controversial $22.7 loan being sought for infrastructural development. 

The Senate lost a bit of its unity even though the approval was eventually given to the loan request. It was a straight disagreement between those opposed to automatic approval of the loan and those who wanted a thorough debate on every item of the request. 

Senate President, Lawan, Senate Minority leader, Abaribe and even Senate Leader, Abdullahi Yahaya were locked in very bitter altercations regarding the procedure to be adopted. The uproar degenerated into an initial stalemate that forced the Senate into a closed-door session, where it was learnt that the debate took partisan colouration.

The major contentious issue was that while Lawan preferred that the matter is treated by voting according to recommendations of the report by its committee on local and foreign debts, many senators wanted all issues raised in the loan request considered and debated in detail to allow Nigerians opportunity to know why the loan was being approved.

Chairman of the committee, Clifford Ordia (PDP, Edo) read out the report and recommended that the Senate approve the request. The Senate had commenced deliberations on the $22.7 billion external borrowings as requested by Buhari when Senator Adamu Aliero came under order 43 to say that the report was big and voluminous and therefore not fair for the chamber to just receive it and act on it without studying it.

He said, “This is something to do with a foreign loan to the tune of $29b. I therefore strongly suggest that you allow us to go through this report this week.”

He further said by so doing they would be informed to treat and do justice to it and Nigerians would know that they were serious in dealing with the weighty issue. However, Lawan appealed to his colleagues for the report to be debated, saying the media would feast on it if they allowed it to be put off till the following Tuesday when the report would have leaked to the press.

According to Lawan, “If we are going to postpone the deliberation of the report, we have to keep the document from the press otherwise the media will discuss it before the senate discusses it and we would lose relevance. I believe that we have to weigh it, whether we are prepared to delay it, but I agree with your point. The only consolation I have from where I seat is that we have a committee that helped us in putting these things together.

“I believe that we trust our committee, that when our committee takes us through what they have done, I want to believe that where we have an issue we can raise the issue. But the risk we have is if we don’t consider it, this thing will just go out and it will be out of our hands.”

The minority leader invoked order 43 and, later order 14, to ensure the senate considered the report part by part, section by section, so they could have a clear understanding of the loans that are relevant to boosting the economy, but Lawan insisted they voted according to the recommendations.
Eventually, the Majority Leader Yahaya also suggested that the report be considered part by part to avail the senators’ full knowledge of every item and detail of the bill.

When the stalemate became obvious, Senator Gabriel Suswan asked senate president to allow the Senate to go into an executive session, saying he was privy to a report on the power that he could not divulge on the floor. But Lawan insisted that the consideration would be done as a whole and a voice vote ordered for senators to vote.

Lawan, however, insisted that they had reached a point of no return but later succumbed to pressures before the senate went into a prolonged closed-door session.

When the lawmakers resumed, they seemed to have gotten their acts together as they approved the $22.7b loan request. Buhari had sent the same request to the 8th Senate under Bukola Saraki in 2016. He had requested about $30 billion. The then lawmakers, however, rejected the request as the majority voted against it when it was brought forward for consideration.