The House of Representatives yesterday consented to President Umaru Yar'Adua's request to get $500 million loan from the World Bank.
The loan was approved after a motion sponsored by the Chief Whip, Emeka Ihedioha, and seconded by John Kalipa (PDP, Rivers).
Mr. Ihedioha, who stood in for the House Leader, Tunde Akogun, said that Mr. Yar'Adua had in a letter dated July 27 asked the House to endorse the emergency supplementary expenditure to effectively respond to current challenges.
He reminded the house that the 2009 Appropriation Act inadvertently omitted or insufficiently provided for certain items, adding that the supplementary budget will be funded from a special concessional facility from the World Bank.
The lawmaker said that the concessionary terms for the World Bank facility include zero interest rate, 0.7 per cent for service charge, 0.5 per cent commitment charge on undisbursed balance, 10 years grace period and 40-year-repayment period, among others.
Mr. Ihedioha said that if granted, the loan will address core infrastructural development in power, works, transport and aviation sectors.
Earlier however, there was confusion over the President's request for the loan. Dino Melaye (PDP, Kogi) while invoking Order 8 (4) of the Standing Rules, had complained that the Federal Executive Council last Wednesday approved a $300 million loan from the International Development Association to fund the power sector without recourse to the National Assembly.
He stated that the finance minister and his counterparts in the ministries of power, justice, and power as well as officials of the Debt Management Office and Power Holding Company of Nigeria, entered into negotiations with the association between May 11 and 13 this year.
He added that on June 16, the World Bank executive met with the officials after which the federal executive council asked the minister of finance to implement the plan to obtain the loan.
Violation of Constitution
Mr. Melaye said that the executive arm violated Sections 21 (1) and 22 (3) of the Debt Management Establishment Act by not consulting the National Assembly on its plan to take the loan.
He said that when Mr. Yar'Adua wanted to grant a loan to Sao Tome and Principe he asked the National Assembly for approval, wondering why he could not do so when he was planning to take the $300 million from the World Bank.
Chairman of the Committee on Rules and Business, Ita Emang, reminded the House that the President had in July written the National Assembly asking for permission to get a loan to fund the emergency supplementary budget.
He said that the House approved the budget but did not approve the loan at that time. Mr. Enang said he had met with Mr. Melaye severally on the issue with a view to explaining the matter to him.
However, in his response, Mr. Melaye insisted that the two are different loans since "one is $300 million and the other $500 million" and that the House should treat it as a matter of urgent importance on the next legislative day.
Both the deputy finance committee chair and his police affairs counterpart also made contributions and called for caution. In the end the loan was approved, but to ensure clarity on the matter, the Speaker, Dimeji Bankole asked the committees on finance, appropriation and local and foreign debts to investigate if the $500 million dollars approved is inclusive of the $300 million that president obtained from the international Development Association. Mr. Bankole asked the committee to report their findings during the next legislative session.
Supplementary budget
Also on Wednesday, the lawmakers approved the N353.6 billion as supplementary budget for the President. The amount is higher than the N352.8 billion requested by Mr. Yar'Adua two weeks ago.
However, the lawmakers approved an amendment proposed by Mr. Ihedioha to transfer N2 billion from the N10 billion allocated to the Public Mass Transit (Revolving Fund to Procure Vehicles) to complete the Port Harcourt-Opobo-Azumini-Ukanafun Road. This leaves the allocation to mass transit at N8 billion.
They also asked the Federal Capital Territory Minister, Adamu Aliero, to send to the House a written explanation on how the contracts for the expansion of airport and Kubwa roads were awarded. The deputy chairman of the Committee on Finance, Leo Dilkon, had informed the House that Mr. Aliero opted for Private-Public-Partnership when the banks which were to grant loan to the FCT to fund the projects asked for 23 per cent interest rate on the loan.
Mr. Dilkon said that with the new arrangement, the FCT will be saving the nation about N109 million.
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