Reps read riot act to Finance ministry over $200m foreign loans allocation

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The House of Representatives Committee on Aids, Loans and Debt Management Wednesday read the riot Acts to the Federal Ministry of Finance over its allocation of $200 million for foreign Loans requests from the State Governments.

Members of the Hon. Adeyinka Ajayi- headed Committee were livid that the Ministry insisted that the loan request had been pegged to $200 million in spite of the fact that the House had the mandate to scrutinize and approve such requests.

Trouble started when the Ministry of Finance, represented by a Deputy Director, Benson Odaura insisted that the French Development Agency component of the foreign borrowing plan has a total ceiling of $200 million. According to him, the development agencies must deal directly with the Ministry and not the states.

The Ministry, he also said, would determine how much each of the four states would get from the $200 million approved.

But the committee said they had the mandate of the House to scrutinize the foreign loans process by state governments, adding that there are a number of parameters they must fulfill in line with the Fiscal Responsibility Act, but under the oversight of the committee. ” We will not cede that discretion to the Ministry of Finance,” Ajayi vowed.

His words: “The ministry didn’t say they had only four states in the borrowing plan. The issue of states came up during the interaction with the French development Agency component of the borrowing plan . The French Development Agency Component as requested by Mr. President is in respect of four states. Those four states are Kano, Enugu, Ogun and Plateau State. Now. That agency had the sum of 200 million dollars lumped together.

“In our interaction with respective states, each state made presentation to their own requests as a component of the $200 million. And in computing, we realized that we will exceed the $200 million going by the request of the states. So we needed the Ministry to explain what it’s going to do. But what we said was that we were not going to cede that discretion to the ministry.

Another member of the committee, Hon. Jones Onyeriere said the Ministry of Finance “is being mischievous. They can’t come here with an omnibus proposal. Loans are given on request by the states,” he said.

However, during the presentation, the Ogun State government requested for approval for a foreign loan of $350 million. However, the committee was not happy with their presentation saying it did not match projects to funding

Ogun State Commissioner for Budget and Planning Adenrele Adeshina however, stoutly defended the government saying there will be a risk of misrepresentation if she told the committee “here today we are going to do ABC with the funds. It’s more representative of the part of the engagement that we are . We have separate programmes and they decide where they want to support us. It’s a work in progress.” She came with her Finace counterpart, Adewale Oshinowo.

Engr. David Jaafarn Wayep Commissioner, Ministry of Water Resources and Energy, Plateau State said the state is asking for $50 million and that Plateau State has the ability to pay the loan being requested.

According to him, the Internally Generated Revenue of the state has moved from N500 million Naira to 1 billion Naira hence it should not be a problem for the state to pay . He said the State Government have done a lot of work on its financial management.

The Deputy Governor of Ondo State, Hon. Agboola Ajayi who represented the Governor explained that as a new government they “met a lot of huge debts and liabilities” and hence were asking for $57 million loan which he said translated to N17.3 billion at 305 per dollar

The loans, according to him, has a 20 years maturity, with 7-year grace period.

The chairman of the committee, Adeyinka Ajayi (APC Osun) stressed the fact that all applications for foreign loans from state governments must meet the requirements of section 44 and 44 (2) of the fiscal responsibility act.

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