Northern Governors Under Fire for Saudi Loan

 
Senate committee chairman on Foreign and Domestic Debts, Senator Shehu Sani, has described a recent move by 19 northern state governors‎ to obtain a loan from a Saudi-based Islamic Development Bank as a direct violation of the laws of Federal Republic of Nigeria.
Sani
, who represents Kaduna Central in the Senate, said 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.
He said the Debt Management Office (DMO) act of 2003, section 21 and external borrowing guidelines of 2008-2012, paragraph 2, clearly states that “Any Government or it’s agencies can only obtain external loan through the federal government and such loans must be supported by federal government Guarantee.” The act, he said is “explicitly clear that NO state,local government or federal agency shall on its own borrow externally.”
Senator Sani explained: 
“Governors of the northen 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’s approval in principle from the Federal Ministry of Finance.This is the provision 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 government 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 DMO for consideration. The proposal should include the purpose for which the borrowing is intended and its link to the developmental agenda of the Government.“The cost benefit analysis showing the economic and social benefit to which the intended borrow im is to be applied must be shown. Cash flow statements of the Ministries, Departments and Agencies (MDAs), to ascertain their viability and sustainability must be known.“To borrow from external sources, DMO has to ascertain if the borrower has not over borrowed and that the borrowing proposal must be incorporated into the annual budget for Federal Executive Council (FEC) 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.”
Sani said whoever led the northern governors to Saudi Arabia to secure a loan is ignorant of the relevant provisions of the law or has therefore chosen to circumvent the law.
“I wish to advice 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,” he added.