By Cyber Era Reporter
In a brave move to checkmate profligacy in governance, a group under the aegis of the Nigeria Opposition Coalition (CUPP), has launched multiple legal offensives with public interest suits filed at the Federal High Court seeking to stop the move by the Muhammadu Buhari-led Administration to borrow away the future of Nigeria and sell the country into economic slavery and irredeemable financial hiatus with the US$22.7 billion loan plan.
CUPP’s communication, signed by its spokesperson Ikenga Imo Ugochinyere, and seen by Cyber Era, says the opposition has also written letters of petition to the foreign lenders to halt the process of continuing the consideration for the US$22.7 billion loan.
“We have warned them to save their money for now and await the outcome of the Court action which we believe will put paid to this fiscally irresponsible move. Also in view of the pendency of the court action and in total deference to Nigeria judicial sovereignty, we warn the foreign lenders including their brokers and brief case lobbyists to suspend all actions pending the final determination of the suit challenging the legality of the loan and in the event of default or disrespect to our laws which amounts to contempt, the opposition if and when we come to power in 3 years will not honour a borrowing bazaar that was consummated during the pendency of an action in Court,” the statement says.
CUPP says further it has sued the Federal Government and the National Assembly in a separate suit and also sued the lenders to stop them and their agents from mortgaging our economic future by consummating a faulty loan deal which will put their depositors money in danger and also fund an owambe urge and shopping extravaganza of a government weakened by corruption and lack of competence and now hustling for loans on the streets of China and Japan to cover their financial recklessness that has put Nigerian economy into dancing alanta dance of death.
CUPP goes further to ask the Court to grant it the following prayers:
- A DECLARATION that having regard to the provisions of Sections 19, 20, 21, 22, and 27 of the Debt Management Office Establishment) Act, the 1st and 2nd Defendants(The Federal Governmentt of Nigeria and President Buhari) while acting in concert with the 3rd and 4th Defendants(Attorney General of the Federation and Minister of Finance) cannot undertake any external loan or borrowing on behalf of the Federal Republic of Nigeria without adhering to the national borrowing programme for the succeeding financial year as may be presented before and duly approved by the 5th Defendant(National Assembly)
- A DECLARATION that it is unconstitutional, unlawful and ultra vires the executive powers of the 2nd Defendant(President Buhari) to undertake to borrow external loans or participate in the negotiation and acquisition of any external loan without the proper legislative framework and approval of the 5th Defendant(National Assembly) in an openly debated, considered and deliberated session of the parliament, where the details of such external borrowing, project financing and projected repayment modalities will be openly debated and considered by the legislature.
- A DECLARATION that the purported approval of the 5th Defendant(National Assembly) for the external borrowing by the 2nd Defendant(President Buhari) having not been done in accordance with the legislative procedure of open debate and consideration of executive request is null, void and of no effect whatsoever.
- A DECLARATION that the exercise of the executive powers of the 2nd Defendant( President Buhari), viz-a-viz the acquisition of external loans and its expenditures on any project, cannot be carried out in a lopsided manner without taking into account the interests of all the component federating units, or in a manner that ensures predominance of some states or geo-political zones over the others or imbalanced economic development or disregard to the entrenched principles of federal character.
- A DECLARATION that the 5th Defendant(NASS) cannot casually approve the request of the 2nd Defendant(Buhari) to borrow any external loan or participate in the negotiation and acquisition of any such external loans without first carrying out the proper legislative oversight and scrutiny of the loan request, due consideration of the national borrowing programme for the succeeding financial year as well as debate of the viability and feasibility indices of the projected expenditures and the repayment modalities.
- A DECLARATION that it is unlawful and unconstitutional for the 4th Defendant(Finance Minister) to offer or undertake any guarantee for the requested external loans made by the 2nd Defendant(President Buhari) when the terms and conditions of the said loan has not been duly laid before, considered and approved by the 5th Defendant(NASS) as mandatorily stipulated under the law.
- A DECLARATION that the action of the 1st, 2nd and 4th Defendants in undertaking to borrow external loans or participating in the negotiation and acquisition of any external loan without complying with the mandatory provisions of the law with regards to the specification of the cost-benefits, the economic and social benefits to which the borrowing is intended to be applied, viability/feasibility test on the sustainability of the borrowing and project financial as well as loan repayment projections is unlawful, contrary to the intendment of the law and therefore null and void.
- AN ORDER setting aside and/or nullifying any request for approval for external borrowing made by the 2nd Defendant(President Buhari) to the 5th Defendant(National Assembly) for being unconstitutional, ultra vires the powers of the 2nd Defendant(President Buhari) and for non-compliance with the law.
- AN ORDER setting aside and/or nullifying any approval for external loan borrowing made by the 5th Defendant(National Assembly) as any guarantee purportedly offered by the 4th Defendant(President Buhari) in pursuance thereof.
- AN ORDER OF COURT setting aside and/or nullifying the request for external loan/borrowing made by the 2nd Defendant(President Buhari) for fundamental failure to specify the cost-benefits, the economic and social benefits to which the borrowing is intended to be applied, viability/feasibility test on the sustainability of the borrowing and project financial, loan repayment projections as well as for being lopsided and in breach of federal character. We hope to salvage Nigeria yet again from the precipice. Our patriotic interventions since 2018 have saved the country multiple times from imminent collapse and we shall continue to do so for the sake of our children and their children.
CUPP’s court action may have been triggered off by the approval, by the Upper Chamber of the Nigerian National Assembly, the Senate, March 5, 2020, of a loan request of US$22.7billion, which raised the county’s debt profile to US$108.1billion(N33.078trillion)at a time 96million Nigerians are believed to be living in abject poverty. The country’s total debt burden stood at US$85.4bn (N26.047trn)as at the end of September 2019.
The loan divided the Senate, but in the end, was approved, following adoption of the recommendations of the report of the Senate Local and Foreign Loans Committee, presented by its Chairman, Senator Clifford Ordia.
Buhari had asked the 8th National Assembly to approve the Medium Term External Borrowing Plan for 2016-2018, but the leadership of the Senate led by Bukola Saraki rejected it for lacking details. The loan, which according to him, was to fund critical infrastructure projects in the country, was re-forwarded to the ninth Senate for consideration and approval.
The committee also recommended that the terms and conditions of the loan from the funding agencies be forwarded to the National Assembly prior to the execution of same for concurrence and proper documentation.
Development experts, especially, public finance and other stakeholders in the country’s economic space, have been expressing concern over the loan request with most of them raising concern about the country’s sluggish economic growth, the increasing volatility of the international oil market prices and the implications for Nigeria’s debt repayment capacity.
The Managing Director of Kairos Capital, Sam Chidoka, said he had a challenge with the loan structure, cautioning that “the nation is getting to a situation where we have to worry because of the country’s total debt stock and the sustained crash in oil prices, the main foreign exchange earning source for the country.
“We have to be careful not to get into an unsustainable debt situation. We must use these loans for projects that have direct impact on the economy and that can generate cash flow like power distribution from where we can get back taxes.”
He added that the government should strongly consider storage and processing to reduce losses between farm gate and market, as well at healthcare and education.
The Chief Executive Officer of BIC Consultancy Services, an economist and business development consultant, Dr. Boniface Chizea, said he expected the federal government to use these loans in a way and manner that reflected the intention.
“When you have a borrowing that is project tied, it is easier to monitor unlike when we just borrow for budget support. When you look at our value for money index which is around N9 to every N100 spent, you will be worried about how much value we will get, so the National Assembly must properly scrutinise, and also not renege in its oversight responsibility.
“People have expressed worry about the National assembly being in good working relationship with the executive that is not necessarily a bad thing. They should be partners in progress because they have a joint responsibility to grow the economy”, he said.
He said the leaders had a responsibility for the generation yet unborn and must do all within their power to bequeath laudable infrastructure and not just debt. A tacit approval of the argument by CUPP in their suit.
A Professor of Financial Economics at the University of Abuja, north central, Nigeria, Dr. Mohammed Yelwa, said borrowing was allowed in any government, but that the government must put in place an independent monitoring and evaluation team to scrutinise the utilisation of the borrowed funds.
“Over the years, the country’s political leaders have been known for using borrowed funds meant for infrastructural development for politics. This has been the recurrent issue. We keep saying that borrowing for development is one thing, utilising is another factor.
“I would suggest that FG puts in place a monitoring and evaluation team to properly utilise the borrowed loan. The committee should be independent, should include the Private Sector, EFCC and ICPC. It must not be from the Presidency or the National Assembly,” he said.
The Lead Director, Centre for Social Justice (CSJ) Barrister Eze Onyekpere said the country did not need new borrowings at this time.
“The borrowing is not in accordance with the Fiscal Responsibility Act, which talks on borrowing for capital expenditure and it must be concessional as well as back grounded by a cost benefit analysis. There is no cost benefit analysis for any of the projects they mentioned they want to borrow for,” he said.
He also noted that there was no repayment plan, “especially at this period where the oil prices are dropping, foreign reserves are dropping and there is no concrete plan to earn more dollars”.
