The plan by some governors of Nigeria’s northern region to obtain loan from Saudi Arabia appears to have met a brick wall, as the Senate warned the Chairman, Northern State Governors’ Forum, NSGF, and Governor of Borno State, Kassim Shettima that it is illegal.
Governor Shettima had led four northern governors two weeks ago to Saudi Arabia to negotiate for loan with the Islamic Development Bank, IDB. However, he claimed the visit was just to explore one and not necessarily to ask for loan.
According to the Senate, no state borrows such money without the approval of the National Assembly.
It said that the move to get the loan by the governors was not only contrary to the constitution of the Federal Republic of Nigeria, but also illegal, stressing that the governors should urgently jettison their plan.
The Senate noted that whoever must have led the northern governors to Saudi Arabia for such a loan was ignorant of the relevant provisions of the law or had chosen to circumvent the law.
While urging the governors to read the relevant acts, the Senate stressed that the Islamic Development Bank must not release any of their funds until due process was followed or else they will be “on their own.”
The Senate in a statement, entitled: “Northern Governors’ Saudi loan illegality” and signed, yesterday, by the Chairman, Senate Committee on Foreign and Domestic Debts as well as Vice Chairman, Senate Committee on Foreign Affairs, Senator Shehu Sani, APC, Kaduna Central, said: “The recent solo moves by governors of the northern states to obtain loan from the Saudi-based Islamic Development Bank is in direct conflict with the laws of the Federal Republic of Nigeria.
“The action of the governors runs contrary to the relevant provisions of the Act that clearly and unambiguously vest the exclusive right to borrow externally on the Federal Government.
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“The Debt Management Office Act, 2003, Section 21 and external borrowing guidelines, 2008-2012, paragraph 2.1 clearly states that: ‘Any Government or its agencies can only obtain external loan through the Federal Government and such loans must be supported by Federal Government guarantee’ and the act is explicitly clear that no state, local government or federal agency shall on its own borrow externally.
Part of this story was culled from Vanguard newspaper.