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House suspends NNPC’s $1.5b loan proposal, orders investigation

By on January 17, 2013

Lawmakers yesterday ordered the Nigerian National Petroleum Corporation (NNPC) to suspend all plans to take the controversial, yet proposed $1.5bn loan.

The officials of the NNPC proposed to obtain a $1.5bn loan to pay off its debts and it is believed that President, Goodluck has given NNPC permission to proceed.

The loan was proposed when lawmakers were away on break, however upon return yesterday, they ordered NNPC to halt all plans to obtain the loan, and asked its committee on Petroleum (Downstream), Petroleum (Upstream), Justice and Loans and Debts to look into the matter.

The lawmakers queried the idea and said it was not necessary, stating that the loan would further complicate the nations debt situation.

They also said NNPC’s decision to use crude oil as collateral was very wrong.

Ralphael Igbokwe (PDP, Imo) raised the motion that culminated into the decision while noting that the loan was not included in the 2013-2015 Medium Term Expenditure Frameworks and not in the 2013 budget.

He lamented NNPC’s decision to bypass all necessary sections of the law before taking its decision to get a loan.

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 lawmakers concluded that since NNPC and the ministry of petroleum does not know the channels of due process, they should forget the loan.

The committee mandated to investigate the loan was directed to go straight to work and present its report on the matter in two weeks.