N4.2tr Bond: Lawmakers Insist Buhari Must Account For Past Loans
The frosty relationship between the Executive and National Assembly may take another turn as lawmakers have insisted President Muhammadu Buhari must account for over N9.2 trillion loans or bonds approved by the National Assembly since 2016.
Buhari had in separate letters to the two chambers of the National Assembly read at the House on Tuesday, March 27 and in the Senate on March 28, requested for an approval for a fresh N4.2 trillion bond.
In the letter titled, “Request for the Establishment of a Promissory note Programme and a Bond Issuance to Resettle Inherited Local Debts and Contractual Obligations,” that though Section 41 (1a), 44 (2b) of the Fiscal Responsibility Act (FRA) that proceeds of borrowing by government at all tiers shall be applied solely towards capital expenditure, his government had in August 2017 proposed amendments to the FRA.
The letter gave further insights to the borrowing plans: “The promissory note and bond issuance programme has become imperative to clear these obligations, which include unpaid obligations to pensioners, salaries and promotional arrears of civil servants, obligation to petroleum marketers, contractors and suppliers debt, unpaid power bills and obligation from tariffs reversal in 2014, export expansion grant IMBET, judgment debt and refunds to state government for projects undertaken on behalf of the Federal Government.”
The lawmakers are however angry that the President didn’t discuss with them before writing a letter requesting for another bond posited they may reject the request out rightly.
Some lawmakers who spoke in confidence, told newsmen that the “sins” being counted against the latest loan request are multifaceted, leading to what they described as a near consensus feeling that the request be thrown out.
A lawmaker said, “there is a feeling among Senators and House members that the President was treating them with contempt if not with disgust on key national issues.”
He said the sin is the fact that the nation’s procurement law mandates the government to only borrow money for capital expenditure and the lawmakers are claiming that the bond appears as a way of raising money to finance recurrent expenditure.
In 2016, the Senate had turned down Buhari’s request for $29.9bn foreign loan, describing their gesture as “technical issues.” The loan was projected to fund targeted projects cutting across all sectors with special emphasis on infrastructure, agriculture, and health.
The South East caucus in the National Assembly also took offence that none of the projects to be covered by the borrowing was sited in the zone.