The
Federal Government has given details of some of the foreign loans it
has raised in the last two years and how they were expended.
Kemi Adeosun
According to an exclusive reprt by The Punch, the Federal
Government obtained about $4.8bn from various foreign sources in the
last two years. The loans were expended on various programmes.
The Economic Governance, Diversification and Competitiveness
Support Programme was the highest single financing item on which the
government expended $600m of the borrowed funds from external sources in
the last two years.
Responding to an enquiry from The Punch under the Freedom of
Information Act, the Federal Government, through the Debt Management
Office, said it received $600m from the African Development Bank for the
EGDCSP.
The AfDB said on its website that the programme would help the
government to create the fiscal space to facilitate a smooth
implementation of the government’s budget, support fiscal and structural
reforms, and improve the targeting of social sector spending to protect
the most vulnerable segments of the population.
While the first tranche of the programme costing $600m was approved
in 2016, the second tranche costing $400m is expected to be approved
this year to take the total value of the loan to $1bn.
Another major loan of $500m came from the International Bank for
Reconstruction and Development for Nigeria’s development finance
institutions. The item also attracted $400m from the AfDB in addition to
another $400m secured from the African Development Fund.
The Federal Government secured $500m from the International
Development Association, an arm of the World Bank, for the Saving One
Million Lives, which is a scheme to expand access to essential primary
health care services for women and children.
Three states, Rivers, Ogun and Lagos, benefitted from the foreign
debts secured in the last two years. The Federal Government secured
UA3.3m ($5.06m) and $200m for the Urban Water Sector Reform and Port
Harcourt Water Supply and Sanitation projects, and $33.17m for the Ogun
State Urban Water Supply Project.
It also obtained $100m from the AFD for the Lagos Integrated Urban Development Project.
From the International Development Association, the Federal
Government secured $200m, $70m, $140m and $70m for the Polio Eradication
Support Project, Higher Education Centres of Excellence Project,
Community and Social Development Project, and African Higher Education
Centre of Excellence Project, respectively.
Another $140m was obtained from the World Bank for the Community
and Social Development Project. The Polio Eradication Support Project
received another $200m from the IDA, while the Nigerian Partnership for
Education Project also received $100m from the same organisation.
From the Export-Import Bank of China, the Federal Government
obtained $325m for 40 plants under the Parboiled Rice Processing Plant
Project; and $280m from the AfDB for the Enable Youth Nigeria Programme.
Also from the AfDB, the Federal Government obtained $250m for the
Inclusive Basic Service Delivery and Livelihood Empowerment Integrated
Programme.
From the IDA, the government also obtained $200m for the
Multi-Sectorial Crisis Recovery Project for North Eastern Nigeria and
$90m for the Regional Surveillance Systems Enhancement.
The government’s response to The Punch's enquiry, which was
directed to the Minister of Finance, Mrs. Kemi Adeosun, did not indicate
how far it had gone in implementing the projects for which it obtained
the foreign loans in the last two years of the current administration.
Experts have at various times expressed fears that governments
across the country borrow funds that are not tied to projects but to
finance routine expenditure such as salaries and overheads.
While this may be true of local debts, foreign agencies hardly lend without knowing what the funds will be utilised for.
The response of the Federal Government to Punch’s enquiry showed
that local debts were not tied to any specific projects but warehoused
in the Central Bank of Nigeria for financing budget deficits.
Some stakeholders say the government should only borrow to finance
capital projects and infrastructure that have the capacity to generate
funds for both debt servicing and repayment of the principal.
This is hardly the case as most of the debts are spent on programmes and routine expenses.
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