Chinese Bank Rejects Federal Government’s $22 billion Loan Proposal – Reps

  • N’Assembly moves up the implementation of the 2022 budget to June

On Tuesday, the House of Representatives accepted the federal government’s proposal to borrow $973,474,971.38 from the China Development Bank.

This came after the China-Exim Bank decided to deny Nigeria’s request for a loan of $22,798,446,773 that had previously been approved by the National Assembly.

Abubakar Fulata, the chairman of the House Committee on Rules and Business, proposed to alter the legislative body’s resolution approving the unsuccessful loan transaction.

Revocation of the 2016–2018 Federal Government External Borrowing (Rolling) Programme was the title of the motion.

Fulata remarked that the motion was moved.
“The House notes that on March 5, 2020, and June 2, 2020, respectively, the Senate and House of Representatives approved the 2016-2018 Federal Government External Borrowing (Rolling) Plan.

The National Assembly only approved the amount of $22,798,446,773 under the 2016–2018 Medium Term External Borrowing (Rolling) plan, the House recalled. The House is aware of communications from the Federal Ministry of Finance asking for approval of changes to the financing proposal for the Nigerian Railway Modernization Project (Kaduna-Kano segment) as a result of the COVID-19 pandemic, as a result of which China Exim Bank withdrew its support for financing the project.

The contractor (CCECC Nigeria Limited), in coordination with the Federal Ministry of Transportation, recruited China Development Bank as the project’s new financier for the sum of $973,474,971.38, the speaker continued.

Fulata requested that the House “rescind its judgment on the financier and harmonized terms and allow the change of financier from China Exim Bank to China Development Bank” to accomplish this.

The prayer was overwhelmingly accepted by the MPs.

In the Kaduna-Zaria-Kano segment, China Development Bank as the lender, a commercial loan with a 15-year duration, euro as the currency, interest of 2.7% plus six months of Euribor, a commitment fee of 0.4%, and upfront charge of 0.5% In were In all In approved In by the House.

After Fulata presented the resolution, Nicholas Ossai, the chairman of the House Committee on Treaties, Protocols, and Agreements, made a statement. He said that the Executive arm of the government had neglected to inform the National Assembly of the specifics of its trade deals with other nations.

Second, we are switching from China Exim Bank to China Development Bank, which necessitates the addition of another agreement, Ossai continued. And if we adopt this resolution, it follows that the members of this honorable House won’t be made aware of those agreements.

“It is necessary and crucial that the Minister of Finance (Budget and National Planning, Zainab Ahmed), when addressing these matters in the National Assembly, bring the agreements reached with the China Development Bank, for the members to be led when endorsing such loan conditions. Mr. Speaker, in my opinion, this resolution should be withdrawn while we request that any agreements reached with the China Development Bank be forwarded by the appropriate authorities.

Femi Gbajabiamila, Speaker of the House, who oversaw the meeting, countered that the substantive committees, particularly the Committee on Transportation, had gone over the specifics.

Ossai claimed that it was an external loan accompanied by an international commercial agreement and that his committee has jurisdiction over such loans.

“I also wrote the chairman of the committee on loans and aid regarding this issue. I wrote the Minister of Finance about this as well,” he said.

Gbajabiamila submitted the motion to a voice vote, and it was unanimously approved. He then asked the chairs of the committees on transportation and aid and loans to meet with him right away following the session.

The Ossai-led committee conducting the investigation had claimed that the contracts contained “hazardous” conditions; nonetheless, the House has remained silent regarding the purported abandoning of the investigation.

The committee has not yet released its report on the bungled investigation that got underway in 2020.

Furthermore, on Tuesday, the Senate gave its approval to the proposal to postpone until June 30, 2023, the implementation of the capital portion of the 2022 Appropriations Act.

The National Assembly granted the Executive’s request in December 2022 to extend the Federal Government budget’s fiscal year from December 31 to March 31.

This occurred at the same time that the Senate extended the deadline for implementing the 2022 capital budget from March 31 to June 30, 2023.

The extension came after the Senate Leader, Gobir Ibrahim (Sokoto East), led a debate in which he asked the upper chamber to change the Appropriations Act 2022.

He was able to read the Bill three times before it was passed because the MPs loosened their standing rules to allow for faster discussion and adoption.

Before approving and passing the proposal to extend the life of the 2022 budget to June 30th, 2023, the Senate later convened a “Committee of Supply” to evaluate the report.

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