Thursday, April 22, 2010

Government borrows $1 billion from world bank

The Federal Government has borrowed US $915 million from the World Bank to finance an expected deficit in the 2010 budget, it emerged yesterday.

Acting President Goodluck Jonathan sent a letter to the Speaker of the House of Representatives seeking approval to borrow the money.

Jonathan said the money was needed because Nigeria was in dire need of funds to finance an infrastructure deficit, which he said is critical to rapid development. He also said the credit is highly concessionary, offered by multilateral agencies to which Nigeria belongs and commits substantial resources as affiliation fees.

Jonathan said in the letter, "The World Bank portfolio of the facilities totalling $915 million out of which $179 million would be drawn in fiscal 2010 is of particular essence as it would be deployed to Urban Water and Transport, Human Capacity Development and Power infrastructure projects across the country." He said the borrowing plan was in consonance with due process and appealed to the House of Representatives to approve it. The total budget deficit in the 2010 budget stands at N1.3 trillion naira, while the whole budget is N4.06 trillion naira.

Meanwhile, the Acting President is expected to sign the 2010 budget at 10am today at the Presidential Villa. This followed a meeting between him and the leadership of the National Assembly on Tuesday, during which the lawmakers agreed to remove projects that were inserted in the budget without the knowledge of the executive.

Jonathan was reportedly not happy with the padding of the budget by the appropriation committees of the two chambers, saying they might have taken advantage of President Umaru Yar'adua's illness.

Passage of the budget, which was approved by the National Assembly and forwarded to Jonathan last month, has been delayed for weeks due to differences between the Presidency and the lawmakers.

Minister of State for Information and Communications Labaran Maku, while briefing reporters shortly after the Federal Executive Council meeting yesterday, said the budget would be signed before the week runs out. He said Jonathan was unable to assent to the budget because of certain discrepancies which he said have to be sorted out.

But later yesterday, Jonathan's spokesman Ima Niboro came up with a terse statement saying the budget would be signed today by 10 am. "Budget to be signed tomorrow by 10 am", Niboro said in the statement.

"The Acting President told us that the National Assembly has forwarded the approved budget which the executive arm is looking at, so from what the Acting President told council, the leadership of the National Assembly and the presidency are discussing on the areas of discrepancies and we expect that between now and some few days, the budget will be signed into law because we do not have a lot of time to wait. Already we are in the month of April, the nation is expecting a lot of activities to regenerate the economy and give life to socio-economic activities in the country," Maku said.

The budget aims to increase expenditure by 50 percent this year as Nigeria tries to spend its way out of a downturn, but the increase risks pushing the country to a budget deficit of more than 5 percent.

On the golden jubilee anniversary, Maku said the council had received the report of the presidential committee chaired by the Secretary to Government of Federation Mahmud Yayale Ahmed.

He said the council called on Nigerians to be mobilized to celebrate the golden jubilee of the nation. "The state governments are expected to draw up their own programs as well. The logo would also be unveiled very soon," Maku said.

On the recent trip of the acting President to United States, foreign affairs Minister Odein Ajumogobia said the trip had tangible benefits to Nigeria. "The tangible benefit of the Acting President's trip to US is something we have to work on In terms of follow up, in terms of trying to engage our partners to address our domestic issues of power, infrastructure and so on and that is what this trip did," he said.

Daily Trust

Related story: World Bank states 18 million Nigerians will become poorer in 2009

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