Group demands full disclosure of $1 billion Boko Haram loan

Group says with proper resource management, government can afford the money itself.

The Centre for Social Justice, CSJ, on Thursday demanded from the Nigerian Government full disclosure of the terms and conditions for which the presidency was seeking to borrow $1billion (about N168 billion) to fight Boko Haram.

President Goodluck Jonathan on Tuesday wrote to the Senate President, David Mark, seeking approval of the Senate to take the external loan sources to upgrade security equipment and boost security forces capacity to fight insurgency in the Nigeria.

The loan, he said, would also be used for the training and provision of logistics for the military and other security services, to enable them be more forceful in their effort to confront the serious threats of insurgency.

The letter was, however, silent on the specific source of the loan, conditions for the loan, terms of repayment, and, particularly, the interest rate attached to the loan.

The request came amid criticisms about the management of Nigeria’s defence budget, which gulped more than N1 trillion, about 20 per cent of the entire 2014 budget.

Some concerned Nigerians say despite the huge expenditure, the military remained ill-equipped to tackle the scourge of insurgency, which has claimed several thousands of lives since it began.

CSJ in criticising government’s decision to take the loan, said apart from the cost benefit analysis of the loan detailing the economic and social benefits, the specific source of the loan and the interest rate attached to the loan must be disclosed.

The CSJ in a statement by its lead director, Eze Onyekpere, said it was not clear whether the loan would be concessional in line with the requirements under the Fiscal Responsibility Act, FRA, that the loan must not attract more than 3 per cent interest rate per annum.

It said the FRA authorised borrowing only for capital expenditure and human development provided such borrowing was on concessional terms with low interest rate and with a reasonably long amortisation period.

While increasing the tempo of activities against the terrorist groups was desirable, he said, it defied common sense, law and reason for the National Assembly to approve the request without following the procedure laid down in the FRA and starting the process to make the fiscal system more accountable.

Mr. Onyekpere said it was not clear whether the President would send in a Supplementary Appropriation Bill to the National Assembly for approval, since the loan request was not one of the funding sources of the 2014 Appropriation Act.

Rather than source for loan to fight Boko Haram, Mr. Onyekpere said, government should have focused its attention to curb wastefulness by blocking the leakages in the country’s fiscal system, particularly in the petroleum industry.

“Nigeria cannot be looking for resources to fight the insurgency, while refusing to block the leakages in its fiscal system,” he stated.

He drew attention to the waste emanating from the loss of over 350,000 barrels of crude oil every day to sabotage and theft in the Niger Delta region, which he said government had left unattended.

According to Mr. Onyekpere, with 350,000 barrels of crude oil a day at an average price of $100 dollars per barrel, the government would have realised a minimum of $35 million a day, about $1.085 billion in a 31-day month, which is more than the $1billion requested.

He also indicted the Federal Government for refusing to investigate and call to account persons who mismanaged various security contracts in the country, including the Abuja close circuit television, CCTV, contract on which about $470 million was spent.

“Pray, how can the FGN be asking for approval to borrow when it has failed to properly husband the resources entrusted to it? Where is the guarantee that if the loan is approved that the resources will not be mismanaged?” Mr. Onyekpere asked.

He called for the recovery and return to the treasury of the money paid for the Abuja CCTV contract, pointing out that the recovery was based on the consideration for which the money was paid.

Calling for the audit of defence spending since the return to civil rule in 1999, he decried a situation where Nigeria, blessed with abundant resources, frittered it away and then proceeds to borrow.


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