Senate Chairman on Foreign and Domestic Deb cautions northern govs on Saudi loan

The Senate Committee on Foreign and Domestic Debt has cautioned northern states governors against obtaining loan from the Islamic Development Bank without following due process.
Chairman of the Committee, Senator Shehu Sani(APC, Kaduna central) at the weekend said the recent solo moves by the governors to obtain such loan from the Saudi based Islamic Development Bank was in conflict with the laws of the federation.

He said the action of the governors ran contrary to the relevant provisions of the act that clearly and unambiguously rest the exclusive right to borrow externally on the federal government.
Quoting the Debt Management Office Act 2003, section 21 and external borrowing guidelines, 2008-2012, Paragraph 2.1, he said 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.
“State Governments and their agencies wishing to obtain external loans shall obtain federal government approval in principle from the federal ministry of finance .This is the provisions of paragraph 2:2(II) of the external borrowing guidelines,” he said.
Sani who is also the Vice chairman of Senate committee on Foreign Affairs said the act is explicitly clear that no state, local government or federal agency shall on its own borrow externally.

 Daily Trust





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