Politics
SERAP Urges Govs, Wike To Show Details Of Chinese Loans
The Socio-Economic Rights and Accountability Project (SERAP) has urged Nigeria’s 36 state governors and the Minister of the Federal Capital Territory (FCT), Abuja, Nyesom Wike to make public details of Chinese loans, liabilities, and other external borrowing obtained.
The demand, according to letters to the parties, covers loans by the sub-nationals, guaranteed by the Federal Government and the SERAP also wants to know the terms and conditions for any such borrowing including the provisions on collateral, according to a statement.
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The SERAP urged them to “provide details of the repayment obligations regarding any Chinese loans, liabilities and other external borrowing obtained and guaranteed by the Federal Government, the interest rates on the loans, and any defaults, debt restructurings, and debt exposure to China and other creditors.”
In addition, the SERAP also urged them to “clarify any investment agreements with Chinese companies and repayment histories of any loans, liabilities and facilities obtained from China and other external creditors and guaranteed by the Federal Government.”
In the letters, signed by its deputy director Kolawole Oluwadare, the SERAP wrote, “We are concerned that your state and the FCT may have failed to efficiently manage your debt obligations, especially your external debt and investment obligations, as guaranteed by the Federal Government.
“The failure to uphold your obligations is contrary to Section 6 of the Debt Management Office Establishment (Etc), Act, and creates financial risks and other exposure to Nigeria with respect to these Chinese loans, liabilities and other external borrowing.
“These Chinese loans, liabilities and other external borrowing by your state and the FCT may not have been used for the purposes for which they have been obtained and terms and conditions guaranteed by the Federal Government.”
The SERAP declared that, the “SERAP is concerned that there is a significant risk of defaults of the Chinese loans, liabilities, and other external borrowing by your state and the FCT, which are guaranteed by the Federal Government.
“There are also significant risks of confiscation of Nigerian assets in foreign jurisdictions by multilateral and bilateral agencies and other creditors in cases of failure by your state and the FCT to satisfactorily observe and fulfil the terms and conditions of the Chinese loans, liabilities and other external borrowing which are guaranteed by the Federal Government.
“The apparent inadequacy of safeguards and accountability mechanisms for these Chinese loans, liabilities and other external borrowing may also expose Nigeria’s assets in foreign jurisdictions to confiscation.
“Your state and the FCT have a shared obligation to ensure that the spending and repayment plans of Chinese loans, liabilities, facilities and other external borrowing are consistent with the provisions of national and international standards, and to prevent or mitigate risks of confiscation of Nigerian assets abroad.
“We would be grateful if the recommended measures are taken within 7 days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall consider appropriate legal actions to compel your government and the FCT to comply with our request in the public interest.
“Despite several external loans, liabilities, investment obligations and external borrowing obtained by your state and the FCT, which are guaranteed by the Federal Government over many years, millions of Nigerians in your state and the FCT continue to lack access to regular electricity supply and have been denied the benefit of renewable energy solutions.
“A recent report by the National Bureau of Statistics (NBS) revealed that over 133 million Nigerians are living in different categories of poverty, the majority of them women and children.
“SERAP is seriously concerned that many of the country’s 36 states and FCT are allegedly mismanaging public funds which may include Chinese loans, liabilities and other external borrowing obtained from bilateral and multilateral institutions and agencies and guaranteed by the Federal Government.
“We urge you to disclose the spending details of these Chinese loans, investment obligations and external borrowing, including details of and locations of projects as well as the implementation status and completion reports, if any, on the projects.
“According to Nigeria’s Debt Management Office, the total external debt for Ogun State is N168,833,006.66 as at December 31, 2023. The total public debt portfolio for the country’s 36 states and the Federal Capital Territory is N9.17 trillion.
“Nigeria’s total public debt stock, including external and domestic debts, increased by ₦24.33 trillion in three months alone, from ₦97.34 trillion ($108.23 billion) in December 2023 to ₦121.67 trillion ($91.46 billion) as of March 31, 2024. The debt represents external and domestic loans obtained by the Federal Government, the 36 state governments and the FCT.
“SERAP notes that the World Bank has approved several loans and other funding facilities to the country’s 36 states including the recent $750 million credit line meant to the states to carry out reforms to attract investment and create jobs.
“The World Bank on 15 December 2020 approved a $1.5 billion loan for Nigeria’s 36 states and the FCT for social protection and strengthened state-level COVID-19 response. The loan aims to help the states build a resilient recovery post-COVID19 and to reduce poverty.
“SERAP is concerned that the Chinese loans and other external borrowing obtained by your state and guaranteed by the Federal Government are vulnerable to corruption and mismanagement.
“Publishing details of the Chinese loans, liabilities, investment obligations and other external borrowing obtained by your state and the FCT which are guaranteed by the Federal Government would allow Nigerians to scrutinise them.
“Section 39(1) of the Nigerian Constitution 1999 [as amended], section 44 of the Fiscal Responsibility Act and article 9 of the African Charter on Human and Peoples’ Rights to which Nigeria is a state party impose legal obligations on your state and the FCT to disclose the details sought.
“Section 41 of the Fiscal Responsibility Act provides: ‘1) The framework for debt management during the financial year shall be based on the following rules: a. Government at all tiers shall only borrow for capital expenditure and human development, provided that, such borrowing shall be on concessional terms with low interest rate and with a reasonable long amortization period subject.’
“Section 44 of the Fiscal Responsibility Act provides: ‘1) Any Government in the Federation or its agencies and corporations desirous of borrowing shall, specify the purpose for which the borrowing is intended and present a cost-benefit analysis, detailing the economic and social benefits of the purpose to which the intended borrowing is to be applied.’
“According to section 21(1)(2) of the Debt Management Office Establishment (Etc), Act, ‘No external loan shall be approved or obtained by the Minister unless its terms and conditions shall have been laid before the National Assembly and approved by, its resolution. (2) The Federal and State Government or any of their agencies shall not obtain any external loan except with a guarantee issued by the Minister.’”
Politics
Nigeria’s Debt Service Ratio Falls To 65% As Tinubu Tackles Economic Woes
In an effort to reduce Nigeria’s debt burden and stabilize the economy, President Bola Tinubu announced on Monday that the country’s debt service-to-revenue ratio has fallen from 97 to 65 percent over the 17 months since he took office.
Speaking at the swearing-in ceremony for seven new ministers at the State House, Abuja, Tinubu emphasized the government’s progress in stabilizing the economy despite challenging conditions.
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“For us, it was a challenge when the nation was servicing its debt with 97 percent of its revenue. It was nothing but the edge of the cliff,” Tinubu said.
“But today, I can report to you that we have brought that down to 65 percent, and we have never defaulted in meeting all obligations, both foreign and domestic.”
His remarks follow Afreximbank’s recent projection that Nigeria’s debt service-to-revenue ratio could reach 110.4 percent by 2024.
Afreximbank’s 2024 Nigeria Country Brief warned of a troubling upward trend in debt servicing, which could see the ratio surge from 33.8 percent in 2017 to a projected 110.4 percent next year.
However, with continued reforms, the report suggested the ratio might decline to 62.6 percent by 2025.
In the first nine months of 2023, debt servicing consumed 66.9 percent (₦5.79 trillion) of Nigeria’s total revenue, a slight improvement from 99.3 percent (₦4.23 trillion) during the same period in 2022.
Tinubu, while optimistic about economic recovery, acknowledged the ongoing struggles faced by Nigerians due to a sharp increase in the cost of living triggered by recent economic reforms.
“We have taken the bull by the horns,” the President asserted. “We have stopped the scavengers. We will fully put an end to the profiteers and smugglers of our resources across the country. We are not shirking our responsibility; we are confronting it head-on.”
He further expressed confidence that Nigeria was on a “good path” toward recovery, emphasizing that the government remains committed to re-engineering the economy.
He cited the introduction of a new minimum wage as one measure aimed at mitigating rising living costs.
Monday’s ceremony also saw the swearing-in of seven new ministers, part of a recent cabinet reshuffle.
In two batches, ministers including Idi Maiha (Livestock Development) and Dr Jumoke Oduwole (Industry, Trade, and Investment) took their oaths.
The reshuffle, which saw 10 ministers reassigned, five discharged, and seven new appointments confirmed by the Senate, reflects Tinubu’s stated commitment to reshaping his cabinet to meet Nigeria’s evolving challenges.
As the administration continues to implement reforms, President Tinubu emphasized a long-term vision for economic sustainability, not only for the current generation but also for future ones.
“Despite the challenges, we must undertake the job of re-engineering and retooling this country’s economic path,” he said.
Politics
Edo Deputy Gov, Omobayo Ordered To Court Over Refusal To Vacate Office
A Federal High Court in Abuja has mandated that Godwins Omobayo, the Deputy Governor of Edo State, appear in person on November 26, 2024, following allegations of contempt of court stemming from his failure to comply with a previous ruling.
Justice James Omotosho issued the order on Monday, asserting that Omobayo, described as the alleged contemnor, must be afforded a fair hearing in accordance with Section 36 of the 1999 Constitution (as amended).
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The court action was initiated by Philip Shaibu, who was reinstated as Deputy Governor after the court invalidated his impeachment by the Edo State House of Assembly on July 17.
Justice Omotosho ruled that the impeachment proceedings lacked due process and that the grounds for Shaibu’s removal did not constitute gross misconduct.
Shaibu’s suit targets several parties, including the Inspector-General of Police and the Edo State House of Assembly, seeking enforcement of the court’s judgment and demanding that Omobayo vacate the deputy governorship position.
Omobayo assumed office on April 8, following Shaibu’s impeachment.
During the court proceedings, it was revealed that Omobayo was served legal documents but failed to appear.
In response, Shaibu’s attorney, Ayotunde Ogunleye, SAN, urged the court to compel Omobayo’s attendance, citing the need to uphold judicial authority.
In delivering his ruling, Justice Omotosho adjourned the case until November 26 for further proceedings.
He directed that hearing notices be served to the 1st, 2nd, 3rd, and 5th defendants involved in the charge.
“In the interest of justice and to provide the alleged contemnor with an opportunity to defend himself and receive a fair hearing, in accordance with Section 36 of the 1999 Constitution (as amended), I hereby order that the alleged contemnor appear in court in person on November 26, 2024,” the judge stated.
It is noteworthy that the current tenure of the state government is set to conclude on November 12.
Politics
Presidency Fires Back At Atiku
On the heels of the salvo fired by the presidential candidate of the Peoples Democratic Party (PDP) in Nigeria’s 2023 elections, Atiku Abubakar, signalling what might be a long-drawn hot exchange of words, the Presidency has made what it called ‘our initial response to Alhaji Atiku Abubakar’.
This was contained in a statement put out on micro-blogging site, X, Sunday by the Special Adviser to the President (Information and Strategy), Bayo Onanuga.
The former vice president had detailed the shortcomings of the President Bola Ahmed Tinubu administration, making efforts to detail what he would have done differently, that would have better results for Nigeria.
In a swift response, the Presidency countered that Atiku and his ideas “were rejected by Nigerians in the 2023 poll”, based on his antecedents.
The statement reads, “OUR INITIAL RESPONSE TO ALHAJI ATIKU ABUBAKAR
“We have just read a statement credited to former vice president Alhaji Atiku Abubakar, in which he tried to discredit President Bola Tinubu’s economic reform programmes while pushing his untested agenda as a better alternative.
“First, Alhaji Atiku’s ideas, which lacked details, were rejected by Nigerians in the 2023 poll.
“If he had won the election, we believe he would have plunged Nigeria into a worse situation or run a regime of cronyism.
“Abubakar lost the election partly because he vowed to sell the NNPC and other assets to his friends. Nigerians have not forgotten this, nor would they be comforted by Atiku’s antecedents when he ran the economy in the first term of President Olusegun Obasanjo’s government between 1999 and 2003.
“As vice president, Atiku supervised a questionable privatisation programme. He and his boss demonstrated a lack of faith in our educational system, and both went to establish their universities while they allowed ours to flounder.
“Talk is cheap. It is easy to pontificate and deride a rival’s programmes even when there are irrefutable indices that the economic reforms yield positives despite the temporary difficulties.
“Despite the futile attempt to hoodwink Nigerians again in his statement, it is gratifying that the former Vice President could not repudiate the economic reforms pursued by the Tinubu administration because they are the right things to do.
“His advocacy for a gradualist approach only showed that he was not in tune with the enormity of problems inherited by President Tinubu.
“It is so easy to paint a flowery to-do list. It is expected of an election loser.
“President Tinubu met a country facing several grave challenges. Fuel subsidies were siphoning away enormous resources we could ill afford, and there was criminal arbitrage in the forex market.
“No leader worth his name will allow these two economic disorders to persist without moving to end them surgically.
“While advocating for gradual reforms may sound appealing, Tinubu took measures that should have been taken decades ago by Alhaji Abubakar and his boss when they had the opportunity.
“Alhaji Abubakar calls for empathy and a human face to reforms. We have no problem with this as it resonates well with our administration’s focus. President Tinubu has consistently emphasised the need for compassion and protection of the most vulnerable.
“The administration has prioritised social safety nets and targeted support for those affected by recent economic transitions.”