As Senate drills Adeosun, Amaechi over $5.5 billion loan request
The Federal Government yesterday said that the sum of $36 billion is required to complete its rail projects in parts of the country.
The Transportation Minister, Chibuike Amaechi, stated this when he appeared before the Senate Committee on Local and Foreign Debts to defend the $5.5 billion loan request of President Muhammadu Buhari.
Apart from Amaechi, Finance Minister, Mrs. Kemi Adeosun, Minister of State for Aviation, Hadi Serika, were also questioned over the desirability of the controversial loan.
Amaechi who listed various rail projects in parts of the country including Lagos to Kano, Costal rail line, Kano to Kaduna, Lagos to Calabar, Port Harcourt to Warri, Onitsha, Aba, noted that if the total cost is summed up, would amount to about $36 billion.
Amaechi said, “If you put it all together, the total cost of the entire rail projects will amount to about $36billion. Actually we don’t have the money. But it’s an ambitious plan. We really have to start something somewhere and see how far we go”
He added, “On the issue of borrowing, I have not seen any country in the world where real construction is done by Public Private Partnership (PPP).
“The reason is that it has long term benefit. It completely takes away freight activities and put them on the track and reduce the impact on the road.
“We have something that is going to happen between now and December. We have almost concluded arrangements with General Electric to take over the narrow gauge.
“And after the assessment by GE, the narrow gauge cannot take up to 17 locomotives. Before December, they will bring in between four and six locomotives with 100 wagons. We are also making arrangements to bring in coaches so that we can convey passengers from Lagos to Kano so that our economic activities will improve.”
The minister said that President Buhari had directed that the rail line projects be extended to cover all 36 State Capitals.
He told the committee that part of the $5.5 billion loan would be used to fund the Itakpe to Warri, Kano to Kadun and Port Harcourt to Calabar portion of the rail projects.
President Buhari had said in a letter to the National Assembly asking for the approval for the $5.5 billion loan that $2.5 billion was being borrowed to fund the Mambilla Hydropower Project, Construction of a Second Runway at the Nnamdi Azikiwe international Airport, counterpart funding for Rail Projects and the Construction of the Bode-Bonny Road, with a Bridge across the Opobo Channel”
Chairman of the committee, Senator Shehu Sani raised issues which he wanted the government functionaries to address to enable his committee advise the Senate properly.
Sani said, “Some of the questions Nigerians and indeed our constituents have asked repeatedly include: What has the Federal Government done with the reported recovered loot allegedly traced to the previous administration? What role can such recovered monies play in the 2017 budget financing? How much indeed has been recovered? Has the National Assembly appropriated the recovered loot for government expenditure?
The Kaduna Central lawmaker insisted that all actions and decisions with respect to the loan request by his Committee and indeed this Senate will responsibly be done only on its merits.
He said, “l will advise therefore, that as representatives of Mr. President, you put your best foot forward and be as convincing as possible with facts and figures for the Senate to fully have your back, with respect to these requests.
“It has become clear that if Nigeria must borrow, we must borrow responsibly, we cannot afford to mortgage the future of our unborn generation; if we must bequeath to the future generation a pile debt, it must be justified with commensurate infrastructural proof of the value of the debt.”
The committee chairman said “the payment plan of this debt will undoubtedly last the length of our lifetimes and possibly beyond. We must live behind a legacy that will appease and answer the questions the next generation of Nigerians will ask.
“We must not allow our children and grand children be enslaved with chains of debts. Eurobond must not be another bondage to Europe.”
Mrs. Adeosun on her part said that $2.5 billion of the loan request was already approved in the 2017 budget
She said that the $2.5 billion was specifically to finance projects in parts of the country.
She said that the duration of the loan could be anything from five to 30 years which would be determined when they get to the market.
Represented by the Director-General of the Debt Management Office, Patience Oniha, the minister also said that the $3 billion is to upset local debts.
She insisted that it is not healthy for the country to have such huge local debt hanging over the country.
She said, “Borrowing at 7% interest rate in the international market is cheaper than borrowing at 17% or 18% interest rate in the local market.”
“It is not the first time government is borrowing long term. It was done in the 60s. Hospitals, schools, roads have long term effect. They don’t go away. We are not postponing any payment. What happens is that when they mature, we roll them over. It is not a case of default
The government functionaries said that the $5.5 billion loan request has nothing to do with the virement request of the Federal Government.
The committee members who wondered why the government could not resort to local resources in servicing the local loans, said that Nigerians must be told told how the projects the loans were to being sought for would assist in servicing and paying back the debts.
On the Abuja Airport project, minister of state for aviation Hadi Serika, said he did not know the cost of the second Abuja runway which part of the $2.5 billion.
The minister said that the cost has not been determined.
About Article Author