Senate warns northern governors against obtaining loans from Islamic Development Bank

Posted by News Express | 15 February 2016 | 2,927 times

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Chairman, Senate Committee on Local and Foreign Loans, Senator Shehu Sani (APC Kaduna Central) has cautioned the 19 northern governors against any plan to obtain foreign loan from the Saudi Arabia-based Islamic Development Bank, IDB.

The archetype critic turned-politician, maintained in a statement issued yesterday that the governors’ move was completely illegal and seriously warned them against it.

According to him, the solo moves by the governors to obtain the loan without passing through the federal government contravenes the laws of the land in all ramifications and must be stopped.

Senator Sani, however, added that if the governors were hell bent on getting the loan, they must be ready to follow the due process of passing through the Debt Management Office at the federal level, the federal Ministry of Finance, the Presidency and the National Assembly.

In his words, “The recent solo moves by governors of the northern states to obtain loan from the Saudi based Islamic Development Bank is in direct conflict with the laws of the Federal Republic of Nigeria.

“The action of the governors runs contrary to the relevant provisions of the act that clearly and unambiguously rest the exclusive right to borrow externally on the Federal Government.

“The Debt Management Office Act, 2003, section 21 and external borrowing guidelines, 2008-2012, paragraph 2.1 clearly states that “Any Government or its agencies can only obtain external loan through the federal government and such loans must be supported by federal government guarantee; and the act is explicitly clear that NO state, local government or federal agency shall on its own borrow externally.

“Governors of the Northern States cannot just jet out to Saudi Arabia to solicit or collect loans without following the due process of the law and the law further states that “state governments and their agencies wishing to obtain external loans shall obtain Federal Government approval in principle from the Federal Ministry of Finance. This is the provisions of paragraph 2:2 (II)of the external borrowing guidelines.

“In addition to the above, paragraph 2.2 (v) of the same guideline succinctly declares that, ‘All external borrowing proposals of the governments and their agencies for the next fiscal year must be submitted not later than 90 days preceding the year to the Minister of Finance for incorporation into the public sector external borrowing program for the coming year’.

“Paragraph 2:2 (vii) demands that borrowing proposal must be submitted to the Federal Ministry of Finance and the Debt Management Office for consideration.

“The proposal should include; (A), The purpose for which the borrowing is intended and its link to the developmental agenda of the Government, (B) Cost benefit analysis showing the economic and social benefit to which the intended borrowing is to be applied, (C) Cash flow statements of the MDAs, to ascertain their viability and sustainability.’ To borrow from external sources the Debt Management Office has to ascertain if the borrower has not over borrowed and the borrowing proposal must be incorporated into the annual budget for federal executive council approval.

“No state or group of states can borrow from external source without approval from the National Assembly and clearance from the federal ministry of justice.

“Whoever led the Northern Governors to Saudi for loan is ignorant of the relevant provisions of the law or he has chosen to circumvent the law.

“I wish to advise the Northern Governors to go back and read the relevant acts. And I call on the Islamic Development Bank not to release any of their funds until the due process is followed or else they will be ‘on their own’.”

•Text courtesy of Nigerian Pilot. Photo shows Senator Shehu Sani.

Source: News Express

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