$1b for ‘bh’: Loan or supplementary appropriation?

“I would like to bring to your attention, the urgent need to upgrade the equipment, training and logistics of our Armed Forces and Security Services to enable them, more forcefully, to confront this (Boko Haram) threat”. “For this reason, I seek the concurrence of the National Assembly for external borrowing of not more than $1bn, including government to government arrangements for this upgrade”. The above is an excerpt   from a letter dated July 15, 2014 to the National Assembly from President Goodluck Jonathan on the urgent need to contain the Boko Haram insurgency, which has allegedly claimed over 13,000 lives since 2009, and which according to the ‘Human Rights Watch’ has also led to about 2500 deaths this year.

Inspite of President Jonathan’s apparent anxiety, the National Assembly delayed consideration of the content of the letter until Parliament resumed from its extended recess almost two months after receipt of the URGENT loan request; the lacuna may be indicative of the National Assembly’s own perception of Boko Haram’s threat as probably less urgent than was connoted in the Executive’s letter of July 15th.

Nonetheless, Boko Haram has, meanwhile, stepped up their assault from the regular pillage and reckless killings of innocent civilians to the open declaration of Islamic Caliphates in seemingly “conquered territories”!

Evidently “there have been widespread criticisms of the President’s demand, as Nigerians across political divides have questioned the expenditure of trillions of Naira which have so far failed to contain Boko Haram in recent years”.

Conversely, in defence of the $1bn loan proposal, Mike Omeri, the Director General of the National Orientation Agency, noted that “it is not out of place for a country to re-enforce its military capabilities,” and “the loan being sought” according to Omeri “is not just to prosecute Boko Haram war, it is to re-enforce the Armed Forces”. Indeed, the recent assault by some soldiers on their commanding officer, was reportedly triggered by the sight of the rifled corpses of their comrades who were slaughtered by an unexpectedly better equipped rag tag army of insurgents.

Nonetheless, some critics of the $1bn loan request have urged the National Assembly to reject the proposal; for example, the Chairman of Lagos State House Committee on Strategy, Security and Publicity, noted that “as long as corruption thrives, any money borrowed would be squandered by few individuals.” The Human Rights Writers’ Association, is also equally concerned that the proceeds of the loan may go the same way as the allocation of N76bn for the failed CCTV project for Abuja.

Distinguished Lawyer and activist, Femi Falana has also rightly demanded for a comprehensive audit of the expenditure of over N3000bn allocated for security between 2010 and 2013. Other loan critics have also suggested rightly or wrongly that the proceeds of the $1bn loan would be deployed to foot the expenses of the electioneering campaigns of Mr. President and the PDP for the 2015 elections!

Conversely, the Arewa Consultative Forum has expressed through its Secretary, Anthony Sanni that “the Group was in support of any measures by the government to end the insurgency, because the issue of security of lives and property is the primary responsibility of any government”.

Furthermore, a human right activist and Chairman of Coalition Against Corrupt Leaders Comrade Debo Adeniran also noted that “with the present security situation in the country, any right thinking person should support any measure that will curb the insurgency.”

However, since the resumption of the National Assembly from recess last week, the debate on the $1bn loan request is yet to commence in earnest; evidently, if the early release of $1bn will actually be pivotal in tipping the war against Boko Haram, then the National Assembly cannot justifiably insist that the President should first satisfactorily account for the judicious application of the 2014 defence budget of N960bn and over N3tn also appropriated between 2010-2013, as the process of a thorough audit and investigation will be protracted and give room for further murderous pillage and consolidation of Boko Haram’s expansion in the North-East, with dire consequences for our economy and our country.

In such event, the situation may have gone beyond redemption or may indeed require much more than the $1bn currently sought by President Jonathan to ultimately checkmate Boko Haram. In any case, some Nigerians may argue that it is inconsistent to quibble about a mere $1bn for an urgent national security issue when we gleefully expended over $12bn to foolishly subsidise petrol prices in place of the widely canvassed realistic possibility of earning billions of dollars annually from a sales tax on petrol without subsidy.

Thus, in view of the present expansionary threat of Boko Haram, it could be pivotal if President Jonathan could immediately access the $1bn funding, with an assurance that tangible success would be achieved against the insurgents, while the National Assembly simultaneously also commences thorough investigations on the application of the defence spending in 2014 and the N3tn so far budgeted for security between 2010-2013.

Advisedly, however, the immediate provision of the $1bn funding need not be in accord with President Jonathan’s request for an externally denominated loan; there is in fact no valid reason why we must seek for a loan which will come at a cost and further deepen our already oppressive debt burden, when in fact, we have over $5bn currently domiciled, idly, in an Excess Crude Account, which is ironically unknown to our Constitution; furthermore, it seems reckless and uncaring to pursue a $1bn external loan at any cost, when we currently celebrate, an idle foreign reserves base of over $40bn with the CBN.

Indeed, if we adopted the external loan option for the requested $1bn, we may inadvertently borrow at a cost from those same institutions in which our “Excess” crude deposits and CBN reserves are domiciled with minimal yield! Besides, the process of acquiring external loans is not akin to a dumb and ready ATM, with immediate cash provision, as the application process for loans is traditionally more extended, and may delay urgent response to further incursions from Boko Haram.

In reality, our Excess Crude Account (ECA) and CBN reserves are as perfect for immediate funding requirements as an Automatic cash dispenser if your account is already funded. So why go through the humiliation of borrowing when we own relatively healthy reserves, some of which our own Central Bank was eager to invest for modest returns in China in 2013? Besides, if the CBN in collaboration with its surrogate AMCON could bail out distressed banks with over $30bn, without external borrowing, a mere $1bn to provide urgent security and defend our National integrity should be out of pocket expenses for the Apex bank. The National Assembly must not be befuddled to approve the request for $1bn external loan to combat insecurity; instead, it would certainly be more appropriate to enact a supplementary appropriation bill to debit our ECA or CBN reserves accordingly.

Source : Independent

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