Chairman, Senate committee on Foreign and Domestic Debts, Senator Shehu Sani, has criticised the move by the 19 northern governors to take a loan from the Islamic Development Bank.

He said the move was a violation of the laws of Nigeria adding that it is contrary to the act of National Assembly, specifically that of the Debt Management Office.

Sani stated that the DMO act of 2003, section 21 and external borrowing guidelines of 2008-2012, paragraph 2, clearly states that ‘any government or it’s agencies can only obtain external loan through the federal government and such loans must be supported by federal government Guarantee.’

Sen. Sani, who is a member of the APC and represents Kaduna Central senatorial district, further said that the act is “explicitly clear that NO state, local government or federal agency shall on its own borrow externally.”

He stated that:

“Governors of the northern states cannot just jet out to Saudi Arabia to solicit or collect loans without following the due process of the law and the law further states that state governments and their agencies wishing to obtain external loans shall obtain federal government’s approval in principle from the Federal Ministry of Finance.This is the provision of paragraph 2:2 (II) of the external borrowing guidelines.

“In addition to the above, paragraph 2.2 (v) of the same guideline succinctly declares that all external borrowing proposals of the government and their agencies for the next fiscal year must be submitted not later than 90 days preceding the year to the Minister of Finance for incorporation into the public sector external borrowing program for the coming year.

“Paragraph 2:2 (vii) demands that borrowing proposal must be submitted to the Federal Ministry of Finance and the DMO for consideration. The proposal should include the purpose for which the borrowing is intended and its link to the developmental agenda of the Government.

“The cost benefit analysis showing the economic and social benefit to which the intended borrow im is to be applied must be shown. Cash flow statements of the Ministries, Departments and Agencies (MDAs), to ascertain their viability and sustainability must be known.

“To borrow from external sources, DMO has to ascertain if the borrower has not over borrowed and that the borrowing proposal must be incorporated into the annual budget for Federal Executive Council (FEC) approval.

“No state or group of states can borrow from external source without approval from the National Assembly and clearance from the Federal Ministry of Justice.”

Senator Sani also accused the governors of ignorance of the laws, hence their decision to break the law.

“I wish to advice the northern governors to go back and read the relevant acts. And I call on the Islamic Development Bank not to release any of their funds until the due process is followed or else they will be on their own,” he added.

Mazi Emeka