Tuesday, July 23, 2024

Senate Stops Governor El-Rufai’s $350m World Bank Loan Request

The Nigerian Senate on Thursday rejected the request of Governor Nasiru El-Rufai of Kaduna, to secure a 35 million dollar World Bank loan for his state. The Senate rejected the request on the premise that obtaining the loan may put so much pressure on the management of the state which presently has a debt burden of $232.1 million.

The Senate took the decision after accepting the recommendations of its Committee on Local and Foreign Debt and contributions by all the three Senators from the state, who declined support for the loan request.

Senator Shehu Sani, who presented the report on Kaduna State Development Policy Operation (DPO) Credit Facility from the World Bank, said although it was approved by the bank in 2016, accepting the loan would compound the financial burden of the state.

He said that if approved, the state total debt stock would rise to $582.1 million Sani explained that the world bank facility was captured in the 2016 – 2018 borrowing plan as approved by the National Assembly and has attractive low financing data of 1.25 percent interest; moratorium of 5 years and a 25 year maturity tenor. He added that the facility was also captured in the 2016-2018 Medium Term Expenditure Framework (MTEF).

“According to the latest Debt Management Office figures, Kaduna State has a total debt stock of $232.1 million,” he said, adding that approving the $350 million loan request would bring the state’s total debt stock to $582.1 million. It would be unsustainable and a huge burden on the state’s finances, the senator, who represents Kaduna central said.

“With the new borrowing, the Debt Service to Revenue Ratio of Kaduna State will further be increased and thus impact negatively on the ability of the state to meet other basic needs of its people. The new debt stock will likely, further erode the economic viability of the State,” he said. Also, Sen. Suleiman Hunkuyi (APC-Kaduna North) said the loan was a misplaced priority and should be rejected. One is amazed to find out what the governor has gone ahead to indicate to the public is completely different from what we found in the application of those facilities. “I am a representative of my people; for whatever reason the Nigerian law stipulates, this chamber shall moderate to approve for such facility. “I crave the indulgence of our colleagues that the application of that loan among other things is indeed a misplaced priority as we have clearly seen and hence strongly stand behind the prayer that this chamber do reject the request for the loan.’’

Similarly, Sen. Danjuma La’ah (PDP-Kaduna South) said “I feel the loan is not important and I am a messenger of my people, my constituency. “My constituency did not give me the authority for a loan to be approved for whatever reason. “The money received by Kaduna state is much; I cannot understand how there is nothing happening in Kaduna. “The government is busy retiring people, sacking people, they are asking for money to do what with the loan. This loan should not be granted,” he said.

Related Articles

- Advertisement -

Latest Articles