GOOD NEWS: House halts NNPC’s $1.5 billion loan proposal

Published:17 Jan, 2013

Lawmakers told the Nigerian National Petroleum Corporation (NNPC) yesterday to pull the brakes on its plan to obtain a $1.5billon loan.

The oil giant proposes syndicated $1.5billon loan to pay off its debt, according to its officials.

President Goodluck Jonathan is believed to have given his nod for the loan.

House members, who were on recess when news of the proposal was broken, retuned yesterday to mandate its committees to investigate the NNPC’s plan.

The Committee on Petroleum (Downstream), Petroleum (Upstream), Justice and Loans and Debts were requested to investigate the plan.

The lawmakers said details of what the loan was meant for were vague, adding that it has the potential to further plunge the nation into greater indebtedness.

Concerns were also raised by the lawmakers on the decision of the NNPC to swap crude oil as collateral for the loan.

The decision of the House followed the adoption of a motion of urgent public importance raised by Ralphael Igbokwe (PDP, Imo), who observed that the loan was neither included in the 2013-2015 Medium Term Expenditure Framework nor in the 2013 budget.

He said the corporation deliberately ignored relevant sections of the law that require it to present such a financial transaction before the National Assembly.

He said: “Section 44 subsection (2) (a) of the Fiscal Responsibility Act prescribes as a mandatory condition, that government in the Federation and its agencies and corporations desirous of borrowing shall show the existence of prior authorisation in the Appropriation or other Act of Law for purpose for which the borrowing is to be utilised (to the National Assembly).

“Furthermore, sub section (3) of same section 21 (2) mandatorily requires the Minister to cause the budget estimate submitted by the corporation and agencies to be attached as part of the Appropriation Bill to be submitted to the National Assembly”.

The lawmaker said since neither NNPC nor its supervising Ministry of Petroleum felt it was necessary to follow due process, the lawmakers should stop the loan.

After putting the motion to voice vote, Speaker Aminu Tambuwal directed the committees to investigate the matter and report back in two weeks.

 

via The Nation

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