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Thursday, 23 December 2010

Senate Stops States From Borrowing Abroad

The Senate two days rejected the request by state governments to borrow from foreign countries, saying its decision was based on lack of adequate information on the loans. The Senate, however, permitted the federal government to borrow $1.537 billion out of the overall $3.702 billion for which President Goodluck Jonathan had repeatedly requested of the lawmakers.

According to the Senate, the approved $1.537 billion had adequate information about them provided to the national assembly. The states could not provide the Senate with information like identification of states borrowing where they were not specifically mentioned; state Houses of Assembly’s resolution approving of such loans and the level of indebtedness of each borrowing states.

“The 2010 external borrowing plan by states were not considered by the committee due to the absence of relevant information,” said Ahmed Makarfi, Chairman, Senate committee on Finance who led the evaluating committees. In an analysis obtained from the Senate, some states planned to use the loans on “capacity building” and pre-conception designs of some unspecified projects. Most senators kicked against their demands saying they were borrowing money to spend on the forthcoming elections.

Sixteen states, including Lagos, Abia and Oyo would have benefited from the loans if they were approved.

Source: 234next

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