A Non-Governmental Organisation, the Centre for Social Justice has faulted the request of President Goodluck Jonathan asking for the National Assembly’s authorisation to borrow the sum of $1bn from external sources for the continuation of the fight against Boko Haram insurgents.
The President’s letter to the National Assembly states that the borrowing is to upgrade the equipment, logistics and training of our Armed Forces and Security Services to enable them more forcefully confront the insurgency.
The group in a statement issued by its Lead Director, Eze Onyekwere, said the request was against the provision of the Fiscal Responsibility Act which authorises borrowing only for capital expenditure and human development.
It said such borrowing shall be on concessional terms with low interest rate and with a reasonably long amortisation period.
“The FRA authorises borrowing only for capital expenditure and human development provided that such borrowing shall be on concessional terms with low interest rate and with a reasonably long amortisation period.
“The request for approval is required to present the cost benefit analysis of the loan detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied.
“The specific source of the loan and the interest rate attached to the loan are not disclosed. Essentially, it is not known whether the loan will be concessional which according to the FRA means a loan at not more than three per cent interest rate per annum.
“It is also not clear whether the President intends to send in a Supplementary Appropriation Bill since this request was not one of the funding sources of the 2014 Appropriation Act.”
The statement said rather than seeking for external loans to fight insurgency, all efforts should be channeled to block the leakages in the fiscal system as this would make more money available for developmental purposes.
It said, “Nigeria cannot be looking for resources to fight the insurgency while refusing to block the leakages in its fiscal system.
“First, the waste that emanates from the loss of over 350,000 barrels of crude oil every day to theft has been left unattended by the Federal Government.
“350,000 barrels of crude oil a day at an average price of $100 per barrel is $35m a day which will amount to $1.085bn in a 31 day month like July 2014. This sum is more than the $1bn requested.”
The group said since huge budgetary allocations have been given to defence ministry within the last few years, there is need to carry out an audit of military spending.
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