• PDP urges NASS to review foreign loans
By Lateef Ibrahim, Abuja and Albart Akota
Former Vice President, Alhaji Atiku Abubakar has expressed concern over foreign loans acquired by the Federal Government to execute some projects in the country saying that debt, by itself, is not bad, but that debt budgeted for unproductive ventures, like the proposed $500 million upgrade of the Nigerian Television Authority and other sundry bogus contracts, is debt that leads to death.
The former Vice President and presidential candidate of the Peoples Democratic Party in the 2019 presidential election said this in a statement yesterday in Abuja.
Atiku is of the view that to trade Nigeria’s sovereignty for this type of project is not right.
While noting that Nigeria had a total foreign debt stock of $7.02 billion as at May 29, 2015, the former Vice President said that the nation’s foreign debt is now $23 billion and rapidly rising.
“Now, we all are aware that Nigeria’s sovereignty may have been traded for foreign loans and God forbids our inability to service those loans, the lender country would take ownership of choice infrastructure on the Nigerian soil. No negotiation could be weaker than that!
“Nigeria had a total foreign debt stock of $7.02 billion on May 29, 2015.
“Today, our foreign debt is $23 billion and rapidly rising.
“Debt, by itself, is not a bad thing. But debt budgeted for such unproductive ventures, like the proposed $500 million upgrade of the Nigerian Television Authority and other sundry bogus contracts, is debt that leads to death.”
According to the statement, Atiku Abubakar has long advocated for a more robust engagement of the private sector and promotion of foreign direct investment as sustainable alternatives through which government could fund infrastructure development.
“But on the contrary, the Nigerian government under the banner of the All Progressives Congress threaded the direction of looking for cheap foreign loans in exchange for the sovereignty for Nigeria.
“Recall that former President Olusegun Obasanjo’s administration initiated a National Privatization Programme with the sole objective of ensuring that the private sector took some measure of influence in social investment portfolio and, in some instances, provided funding for infrastructure development.
“There was nothing in that plan that traded Nigeria’s sovereignty for some cheap loans which, in the light of unfolding revelations of sleaze in some departments of government, would have ended in private pockets.”
For its part, the PDP is calling on the National Assembly to review all foreign loan agreements entered into by the All Progressives Congress, APC, administration and take further urgent steps to retrieve the nation from the international auction.
It said the revelation of obnoxious clauses in the agreements entered by the APC administration with Chinese lenders in the $500 million could mortgage the sovereignty of Nigeria.
The main opposition party said these in a statement yesterday by its National Publicity Secretary, Mr Kola Ologbondiyan in Abuja.
The PDP said it rejects “this reprehensible pawning of our sovereignty” to a foreign interest.
“The PDP reveals that its investigation showed that the mortgaging of our nation’s sovereignty to foreign lenders, including the exposed $500 million loan from China, has been with the active connivance of the APC as a party, even when such is against our national interest.
“The PDP also calls on the National Assembly to review all foreign loan agreements entered into by the APC administration and take further urgent steps to retrieve our nation from the international auction”, it said.
The Minister of Transportation, Rotimi Amaechi, had earlier at the weekend explained that Nigeria was not in any way ceding its sovereignty to China, explaining that the Sovereign Guarantee clause in the loan agreement was to assure China that it can take over the asset constructed with the loan, should Nigeria default.
Amaechi, while speaking on a television programme monitored by our correspondent said: “The terms contained in the agreement is not as if we are signing off the country’s sovereignty. What we do is that we give a sovereign guarantee, which is an immunity clause. The clause is that in case the country defaults, China will come to collect the items agreed upon.”
The minister assured that the Chinese would not take over assets that were not constructed with the money, in case of default. And should the asset depreciate; then the country can discuss other assets they can take over to recoup the loan.
He disclosed that the Federal Government is seeking the National Assembly’s approval for $22.5b loan from China for railway modernization. A breakdown shows that Federal Government is seeking $5.3b for the construction of Ibadan-Kano railway line, $3b for Port Harcourt to Maiduguri, $11.1b for Lagos-Calabar and $3.5b for Abuja to Itakpe.
He noted that the interest rate on the loan is about 2.8 percent, spanning a period of 20 years and has seven-year moratorium, saying with such terms, it is impossible the country will not be able to pay back within that period.
He disclosed that the Federal Government has started paying back $36m out of the $500m loan collected by the Goodluck Jonathan administration for the construction of Abuja-Kaduna standard gauge railway.
On why he is asking the National Assembly to stop probing the loan, Amaechi said: “If you frighten the Chinese that they won’t recoup the loan, they will pull back. They want us to show them evidence that we will pay back, and one of the evidences is that waive backs the immunity clause, so that they can take their asset. It is the immunity clause that is being debated.