Governors must sign-off $1.585bn foreign loan before final approval – Reps insist

The House of Representatives on Wednesday disclosed that it is mandatory for all the Executive Governors and State Houses of Assembly of all the 10 State Governments seeking for the $1.858 billion external loan from Development Partners to sign-off the 2016-2018 external borrowing plan before its gives final approval.

Adeyinka Ajayi, Chairman, House Committee on Aids, Loans and Debt Management while giving his closing remarks on the states’ component of the $29.6 billion  External Borrowing Plan request submitted by the Presidency.

Ajayi stated this on the heels of controversy trailing the submission of Federal Ministry of Finance on the allocation of the $200 million facility from the French Development Agency for Kano, Enugu, Ogun, Ondo and Plateau states.

“What we are insisting on id that at the final nod, the Chief Executive who will sign-off on these requests must be privy and being privy, that means the Chief Executive or his Deputy must find time to attend to this Committee so that we are sure. For example, the delegation from Ondo state came to Abuja with the impression that they’ll get $57 million, peradventure the Ministry of Finance determines that it is only $40 million they can get, the Cheif Executive needs to be aware so that he can take a decision whether or not to proceed with the facility or not.

“The delegation may not have that authority, that’s why we are saying that at the end of this process, the Chief Executive must be aware and must be able to sign-off properly,” he stressed.

The Osun lawmaker who vowed that the Parliament would not surrender its constitutional powers on Appropriatiin to the Executive arm, stressed that the House had before embarking on the six weeks’ recess gave clearance to four states to resume negotiations with the Development Partners

“We will not cede that discretion to the Ministry of Finance. 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 lumped together.

“In our interaction with respective states, each states 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 its going to do. But what we said was that we were not going to cede that discretion to the ministry,” Ajayi (APC-Osun) explained.

In his remarks, Olivier Delefosse, Country Director of French Development Agency, affirmed that the agreement on the $57 million for Ondo state has been sealed but awaiting signing.

He however noted that the facility for other three states are pending. The Agency had in a letter to the Comittee noted that AFD was not involved in the facility Abia, Ebonyi, Kaduna and Katsina.

Speaking earlier, Agboola Ajayi, Ondo State Deputy Governor assured that the $57 million from AFD will help in the reticulation of the water projects for which Federal Government had spent N5 billion and N3.5 billion by the State.

He added that the State has potential to repay the funds considering the technological facilities already put in place by the Governor Rotimi Akeredolu to boost internally generated revenue, adding that the state is currently servicing about N8 billion debt annually and has the capacity to service the $57 million AFD facility for 20 years.

Speaking earlier, Adewale Oshinowo, Ogun State Commissioner for Finance who spoke on the State’s finance strategy and sustainability for the year, disclosed that the State is expected to generate N15 billion annually when the projects are finally completed.

He explained that the state’s debt to GDP ratio has been below the approved threshold while the revenue generation has sporadically increased.

On her part, Adenrele Adesina, Ogun State Commissioner for Budget and Planning explained that 25 percent of the total $350 million World Bank facility will be released this year, while other tranches are expected to be released based on achievement of key performance indicators set by the World Bank, within a period of five years.

She explained that the proposed facility was required for economic development programme especially in the areas of agriculture and provision of critical infrastructure for the 8,000 hectares Agbara Industrial Estate as well as waste management as well as rural road infrastructure.

Adesina who harped on the need to unlock the land potential across the state, explained that the facility will help in the development of the Geographical Information System (GIS) for the state, as part of efforts aimed at reducing time for allocation of Certificate of Occupancy to potential investors, adding that the World Bank is to facilitate the baseline process.

She also reiterated the State’s commitment towards capacity development of farmers as well as other citizens preparatory to the industrialisation of the state.

The Commissioner who noted that the negotiation with the World Bank is ongoing, informed the lawmakers that: “As we continue with the engagement, we’ll now fashion out the areas in agriculture and industrial sectors so that we can know the exact amount to be disbursed.

“It would have been a misrepresentation for me to say this is the particular amount we’re disbursing when we’re yet to reach that point,” she said.

While reacting to some of the presentations, Musa Sarkin Adar (APC-Sokoto) argued that states with huge economic potentials and human capacity like Lagos, Ogun and Rivers require foreign loan when they could generate funds for their developmental projects.

“I’m a bit worried about why states like Lagos, Ogun and Rivers will go and look for foreign loan. If states like mine, Sokoto, Ekiti, Gombe and Cross River would go to look for such loan, it’s understandable. I lived in Lagos for 16 years, and I know what Ogun State has. It’s shameful for states like yours to go looking for such loan,” he said.

On his part, Hassan Saleh (APC-Benue) urged the committee to look at the bigger picture of the vision of Ogun state government.

KEHINDE AKINTOLA, Abuja