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Nigeria borrows $4.4bn from World Bank, hoards $2.6 billion in the face of economic crisis

By on December 31, 2012

Nigeria President, Goodluck Jonathan

Just recently, the Nigerian government was said to be broke, but with the recent events, which have rather confirmed that the government has been hoarding borrowed money, makes it rather tricky to choose which is worse between been broke and hoarding borrowed monies that attract service charge for the purpose intended.

In the last seven years, the Federal Government has borrowed $4.4 billion, although the amount was approved by the World Bank, yet only $1.8 billion has been expended.

The balance, which is $2.6, has not been expended, rather hoarded, or spent secretly on top of service charge accumulating.

This development became public as the House of Representatives sanctioned the Federal Government’s 2013-2015 External Borrowing Plan.

The federal government had proposed a $9 billion external borrowing plan, however after an investigation conducted by the House of Representatives Committee on Aids, Loans and Debt Management on the 2013-2015 borrowing plan proposed by the FG, the committee decided to slash the amount down to $7.3 billion.

The committee presented a report after its investigation. It said; Nigeria has the largest International Development Agency (IDA) portfolio in Africa.

It equally said that Nigeria is the largest recipient of disbursements from IDA between 2009 and 2012.

Hon. Adeyinka Ajayi who is the Chairman, House Committee on Aids, Loans, and Debt Management, while presenting the report to the house said borrowing plans will henceforth be justified before approval, adding that federal and state governments that have met the requirements have been endorsed.

He said states and federal governments has accepted the terms and met what is required of them for borrowing.

He observed that the loans will be acquired under reasonable terms with no interest rates, except the China Export-Import (EXIM) Bank loan at a 2.5 per cent rate of interest, and sizeable cessation and paying back periods.

On the other hand, following the hoarding and indiscriminate spending of borrowed funds, the House of Representatives have ordered that all states and federal government submit their half-yearly reports on all existing external loans taken.

They stressed that the report must include significant information such as, the main amount, the budgeted amount, the balance, the plan for the money, and a detailed report on expenditure.

One Comment

  1. maidas

    December 31, 2012 at 11:20 am

    Borrowing isn’t even d problem.ΨђåƮ Į̸̸̨§ d essence of d loan you borrow when an average Nigerian stil languishes in penury.Our Govt. Keeps borrowing but rather than usurping this money to better the lives of d citizenry keeps siphoning it into their avaricious pocketry.May God help us in dis country!