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In most democracies, parliamentary gridlock stems from opposing views on issues by lawmakers of the ruling party/coalition and those of the opposition. 

However, this happens when the government lacks the controlling majority in the legislature.

Not infrequent, though, is stalemate spearheaded or encouraged by lawmakers of the government in power even with its majority in the parliament. 

This is an indication of fissures within the ruling party.

This latter scenario exemplifies today's Nigeria's National Assembly in which the government "supposedly" has a majority that can help see through its proposals before the legislature. But it hasn't really worked that way!

Recall that the background to the inauguration of the Assembly was laced with intrigues. 

The Senators of the ruling All Progressives Congress (APC) allegedly traded the position of the Deputy Sentence President to the opposition Peoples Democratic Party (PDP), in order to garner majority votes to elect the Senate President. 

This was because the APC, which had its nominees for the principal positions in the Assembly, refused to back the aspirations of the current leaders of the legislature.

Things have never been the same between the executive and the legislature, especially the Senate, as the APC caucuses have to invariably defer to the PDP minority caucuses to sustain their positions. 

And they did this during the composition of the Standing Committees, with "most juicy" committees going to the PDP members. 

This gives rise to the insinuation that the opposition PDP is actually controlling the National Assembly because were the members to withdraw their support, the leadership of the Assembly would collapse immediately.

Though it appeared otherwise, the screening and approval of minister-nominees earlier on in the administration was at the behest of the PDP Senators.

These Senators equally showed their strength during the consideration of the 2016 Budget that was allegedly "padded" to give the Muhammadu Buhari-led APC government a "bloody nose."

The same old politics is reportedly playing out in the consideration of the $29.9bn foreign loan request President Buhari sent to the National Assembly, which rejected the request on technical ground of insufficient information to work with. 

But Senate President Bukola Saraki, the other day pleaded with Nigerians not to politicise the matter, saying the loan request was a "work in progress."

Saraki's admonition came in the wake of strong reactions across Nigeria, for and against the loan. 

While many people, including the opposition PDP and Labour Party (LP) hailed the Senate decision on the loan request, majority of others accused the Senate leadership of again poking its fingers in the eyes of the executive.

Well, while it's not unusual for appropriating for expenditure on major projects to evoke such emotive reactions from the people, government must address the many questions its request has thrown up, so as to assuage the genuine concerns of the people over external borrowings they believe, rightly or wrongly, have no direct or immediate positive bearing on their lives or their zones.

Such questions include :

* Of what relevance are the projects to the socio-economic development of the country?

* Why borrowing $29.9bn that would almost quadruple the country's external loan overhang of about $11.3bn to $41.162bn in just three years?

* What is the percentage of the loan to the debt-to-GDP-ratio? Will it overshoot the 40 percent suggested for emerging and developing economies?

* Why does government not explore an international concession package to execute the projects?

* Is the borrowing part of the estimates in the 2016 Appropriation Act? If not, where did this one spring from?

* Did the government do due diligence on the timeline, the cost line, and the percentage of interest on the loan, and the means of its repayment?

* Why borrowing from multilateral agencies with high interest rates rather than from the International Monetary Fund (IMF), which recently announced zero interest on its loans?

* Besides borrowing, are there no other areas of finding funds, such as taxes, to implement the projects?

* Does the loan cover all segments of the polity - in this case, taking care of the needs of the zones of the federation? If not, why not?

* With public officials' propensity for financial indiscipline, will the loan not constitute another cesspool of corruption?

These and many more questions, whose answers ought to presage President Buhari's letter to the National Assembly, must now be addressed before the government resubmit the proposals to the Assembly.

Yet, what are the issues in contention in the loan saga?

In most democracies, parliamentary gridlock stems from opposing views on issues by lawmakers of the ruling party/coalition and those of the opposition. 

However, this happens when the government lacks the controlling majority in the legislature.

Not infrequent, though, is stalemate spearheaded or encouraged by lawmakers of the government in power even with its majority in the parliament. 

This is an indication of fissures within the ruling party.

This latter scenario exemplifies today's Nigeria's National Assembly in which the government "supposedly" has a majority that can help see through its proposals before the legislature. But it hasn't really worked that way!

Recall that the background to the inauguration of the Assembly was laced with intrigues. 

The Senators of the ruling All Progressives Congress (APC) allegedly traded the position of the Deputy Sentence President to the opposition Peoples Democratic Party (PDP), in order to garner majority votes to elect the Senate President. 

This was because the APC, which had its nominees for the principal positions in the Assembly, refused to back the aspirations of the current leaders of the legislature.

Things have never been the same between the executive and the legislature, especially the Senate, as the APC caucuses have to invariably defer to the PDP minority caucuses to sustain their positions. 

And they did this during the composition of the Standing Committees, with "most juicy" committees going to the PDP members. 

This gives rise to the insinuation that the opposition PDP is actually controlling the National Assembly because were the members to withdraw their support, the leadership of the Assembly would collapse immediately.

Though it appeared otherwise, the screening and approval of minister-nominees earlier on in the administration was at the behest of the PDP Senators.

These Senators equally showed their strength during the consideration of the 2016 Budget that was allegedly "padded" to give the Muhammadu Buhari-led APC government a "bloody nose."

The same old politics is reportedly playing out in the consideration of the $29.9bn foreign loan request President Buhari sent to the National Assembly, which rejected the request on technical ground of insufficient information to work with. 

But Senate President Bukola Saraki, the other day pleaded with Nigerians not to politicise the matter, saying the loan request was a "work in progress."

Saraki's admonition came in the wake of strong reactions across Nigeria, for and against the loan. 

While many people, including the opposition PDP and Labour Party (LP) hailed the Senate decision on the loan request, majority of others accused the Senate leadership of again poking its fingers in the eyes of the executive.

Well, while it's not unusual for appropriating for expenditure on major projects to evoke such emotive reactions from the people, government must address the many questions its request has thrown up, so as to assuage the genuine concerns of the people over external borrowings they believe, rightly or wrongly, have no direct or immediate positive bearing on their lives or their zones.

Such questions include :

* Of what relevance are the projects to the socio-economic development of the country?

* Why borrowing $29.9bn that would almost quadruple the country's external loan overhang of about $11.3bn to $41.162bn in just three years?

* What is the percentage of the loan to the debt-to-GDP-ratio? Will it overshoot the 40 percent suggested for emerging and developing economies?

* Why does government not explore an international concession package to execute the projects?

* Is the borrowing part of the estimates in the 2016 Appropriation Act? If not, where did this one spring from?

* Did the government do due diligence on the timeline, the cost line, and the percentage of interest on the loan, and the means of its repayment?

* Why borrowing from multilateral agencies with high interest rates rather than from the International Monetary Fund (IMF), which recently announced zero interest on its loans?

* Besides borrowing, are there no other areas of finding funds, such as taxes, to implement the projects?

* Does the loan cover all segments of the polity - in this case, taking care of the needs of the zones of the federation? If not, why not?

* With public officials' propensity for financial indiscipline, will the loan not constitute another cesspool of corruption?

These and many more questions, whose answers ought to presage President Buhari's letter to the National Assembly, must now be addressed before the government resubmit the proposals to the Assembly.

Yet, what are the issues in contention in the loan saga?

Completion

President Buhari, in his letter to the National Assembly, sought approval for $29.9 billion External Borrowing (Rolling) Plan, which funds would be used to address the infrastructure deficit in several sectors of the economy.

He said the projects and programmes were selected based on positive technical economic evaluations, as well as the contributions they would make to the socio-economic development of the country, including employment generation, poverty reduction, and protection of the nation's vulnerable population.

In the loan package, the Federal Government will take up 86.3 percent, or $25.8 billion of the $29.96bn financing, while the 36 States of the federation and the Federal Capital Territory (FCT) will account for the balance of $4.1 billion.

Five multilateral institutions, namely, the World Bank, African Development Bank (AfDB), Japan International Co-operation Agency (JICA), Islamic Development Bank and China EximBank, and a Eurobond issue ($4.5bn) are expected to provide the full loan of $29.96bn.

Projects to gulp 61.2 per cent of the loan are: The Mambila hydro-electric power plant ($4.8bn); railway modernisation coastal project (Calabar-Port Harcourt-Onne Deep Seaport segment) ($3.5bn); Abuja mass rail transit project (Phase 2) ($1.6bn); Lagos-Kano railway modernisation project (Lagos-Ibadan segment double track) ($1.3bn); Lagos-Kano railway modernisation project (Kano-Kaduna segment double track) ($1.1bn); and others ($6bn).

However, as it turned out from the consideration of the loan request by the Senate, these figures and the projects they are earmarked for are mere jargons, politically speaking, until they are broken down in details to the near satisfaction of all segments of the society, as represented by members of the National Assembly.

The government apparently failed to do this, and gave the lawmakers the needed excuse to overwhelmingly reject the loan request, and threw it to the public for debate. 

And for a long while, the public looked to read from the same page with the legislators.

The vehement opposition to the loan is expressly stated by the Labour Party National Chairman, Alhaji Abdulkadir Abdulsalam, who reminded Nigerians that part of the problems bedeviling the country was the uncontrollable borrowing of external loans by previous administrations in the name of infrastructural development.

According to Abdulsalam: "It will be disastrous for Nigeria to obtain foreign loans because conditions of loans that allow failing firms to go bankrupt; higher interest rates to stabilise the currency; negative exchange rates reform; economically-flawed development plan; inflationary devaluations; repressive labour laws; unrelenting economic crisis and economic diversification failures, among others, will worsen Nigerians' conditions."

Another rallying cry is the seeming exclusion of the Southeast from areas to benefit from the loan, as captured by Steve Osuji in his back page column in The Nation of Friday, November 4.   

Writing under the caption: '$30b loan, not a dime for Southeast,' he listed the zones for big ticket projects in the loan as: Mambila power plant (Northeast); Coastal railway at the Calabar-Port Harcourt deep sea segment (South-South); modernisation of Lagos-Ibadan-Kaduna-Kano railway (Southwest-North Central-Northwest) and Abuja mass rail transit Phase 2. 

"Not even a tangential mention of the Southeast; it surely cannot be an accident," Osuji said, adding, "... on the small matter of excluding the Southeast of Nigeria from this loan bazaar, it must be depressing, if not agonising to people from this part of Nigeria that their zone do not deserve any major project in a loan they would partake equally in paying back. What a pity?"

Ironically, a plea for the loan has come from the same Southeast, this time from the zone's APC chapter Publicity Secretary, Mr. Hyacinth Ngwu. 

The party argued that with the fall in oil production and its price, "the only quick way out of the present economic recession, which has thrown the masses into untold hardship and weakened all productive sectors of the economy, is by massive spending by the government."

“And with the fall in oil production and its price, the only rational way for government to raise enough fund to exit the economy from recession is through external borrowing which has the advantage of long maturity profile, very little interest rate and creates large space for domestic borrowing by the private sector participants," it said.

Some experts, too (as per Kunle Aderinokun in THISDAY of October 30) endorse government's resort to external borrowing to finance the stated objectives.

For instance, Prof. Akpan Ekpo, Director General, West African Institute of Financial and Economic Management (WAIFEM) said the sharp decline in oil prices, coupled with its volatility, and the unreliability of that source of revenue to finance development does not leave government with many options but to borrow, "and borrowing externally is a better option."

"The projects and/or areas listed by government are vital for the economy not only to get us out of recession but also to ensure sustainable growth," he said. 

"The government must spend on capital projects, power in particular, to get the economy out of the recession. 

“Asking for virement is to follow due process."

For Femi Ademola, Executive Director, Corporate Finance, BGL Capital Ltd., even though the borrowing is significant, the funds would boost Nigeria's economic activities with implications for tax income, "as long as they are channeled to investment in infrastructure."

He answered the question of debt to GDP ratio thus: "The request for approval for $29.96 billion foreign borrowing is very significant considering the current stock of our external debt of about $11.3 billion. 

“In Naira terms, it is equivalent to about N9 trillion. 

"In terms of debt to GDP ratio, it would increase the ratio from 12.77 percent to 19 percent. While this is significant, it is still considerably lower than the ideal of 40 percent suggested for emerging and developing economies."

Now that all opposing views have been laid out, it is left to the government to do its homework, and represent the loan request to the National Assembly. 

Good to see of recent that President Buhari has held meetings with Senate President Bukola Saraki, presumably on the loan package (and other issues of governance), which is in line with the promise of the Minister of Information and Culture, Lai Mohammed, for government to continue to engage the lawmakers on the loan request.

Vice President Yomi Osinbajo has also joined the fray, by involving other principal officers of the National Assembly (and some governors). 

They should not forget especially the Chairmen of such committees as finance, budget, appropriation, national planning, power and transport, some of who have oversight functions on the sectors to be covered by the loan financing.

And for real politick, the engagement could be extended to the various caucuses in the Assembly. 

Only such meetings could break parliamentary gridlock, and enable the government to gauge the actual feelings of the lawmakers, whose contributions would be most invaluable in reshaping the loan package for easy and final approval.

*Mr. Ezomon, Journalist and Media Consultant, writes from Lagos, Nigeria.

 

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