President Goodluck Jonathan yesterday asked the National Assembly for approval to take $7.9 billion (equivalent N1.256 trillion) foreign loans to finance construction of pipelines.

In separate letters to the Senate President and the Speaker of the House of Representatives, presented to lawmakers yesterday, Jonathan said the funds would be used to complete the projects through 2014.
Jonathan did not specify which pipeline works he aimed to finance with the loans, which are to be sourced from the Islamic Development Bank and other institutions.

The new loans, to be included in the medium term external borrowing plans for 2012 to 2014, would shoot up Nigeria’s external debt to $13.5 billion.

According to the Debt Management Office, the country’s foreign debt stock as on December 31 was $5.666 billion, having risen from $4.578 billion a year earlier.

It was not immediately clear whether the construction to be financed with the new loans would be for natural gas or oil pipelines, and there was no immediate explanation from the government.

But Jonathan said the projects were meant to put the economy on track through growth and development, in line with his so-called transformation agenda.

“The pipeline projects are at various stages of finalisation. Therefore, I present herewith a total pipeline borrowing in the amount of $7, 905, 690.00 or $2.64 billion a year being cumulative facilities offered by the World Bank, African Development, Islamic Development Bank, Exim Bank of China and Indian Lines of Credit,” he said in the letter.

Last week, Minister of State for Finance Yerima Ngama announced that government was in talks with the Islamic Development Bank for a $600 million loan, intended for “investment in social infrastructure and power like the provision of turbines for the Zungeru power station.”

This is aside an earlier $300 million loan already taken from the same bank.

Ngama said the facilities would also be used for the construction of health centres; urban and rural water works; housing; and rehabilitation of some state universities.

Nigeria became a member of the Islamic Development Bank in 2005, and holds a $30 billion authorised share capital and an equity stake of $2.28 billion or 7.6 per cent in the bank.

Among pipeline projects the government is known to be involved in are the Trans-saharan Gas Pipeline project, replacement of 2500 kilometres of vandalised petroleum pipelines, Calabar-Umuahia-Ajaokuta gas pipeline estimated at $790million, Ajaokuta-Abuja-Kano pipeline estimated at $1.5billion, and the Gas Master Plan which will cost about $5million.

The Federal Government had said approximately 2,500km of petroleum products pipelines have been vandalised in the southern, north central and north eastern parts of the country, resulting in the movement of fuel products by trucks.

Government said the re-instatement of these pipelines will improve availability of petroleum products across the country, eliminate bridging and reduce highway maintenance costs.

Since assuming office in February 2010 as acting president, Jonathan has been taking Nigeria into further external and internal borrowing to finance government projects, starting in April 2010 when he asked the National Assembly to approve a $950 million World Bank loan.

Trends in Nigeria’s external debt stock over the five-year period which ended 2010, revealed a gradual increase, with the highest annual increment of 15.21 per cent in 2010, according to the 2010 annual report and statement of account of the DMO.

This is coming few years after Nigeria exited the Paris Club in 2005 when $18 billion of its debts were cancelled while the government bought back $12 billion.

Addressing journalists after Senate’s plenary session yesterday, Senate spokesman Enyinnaya Abaribe (PDP, Abia) said the new foreign borrowing was not implying that the nation was broke.

“It has nothing to do with Nigeria being broke. We will get more details when we debate it on the floor of the Senate. We might accept or not depending on the way the debate goes,” Abaribe said.

http://dailytrust.com.ng/index.php?option=com_content&view=article&id=154775:foreign-loan-jonathan-seeks-n13trn&catid=2:lead-stories&Itemid=8

unbelievable!

GEJ is really a dunce, so much for Fresh Air.

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What happened to the Fuel Subsidy Removal Fund na?

They raised enough tax to pay for the entire budget last year, with the potential for more, so why borrow?

Yeske!:

GEJ is really a dunce, so much for Fresh Air.

haba, this is really uncalled for. If you cant combine your thoughts and put them into proper perspective, the ideal thing would be to shut up.

Bash Me:

What happened to the Fuel Subsidy Removal Fund na?

Was the subsidy removed?

Seun:

They raised enough tax to pay for the entire budget last year, with the potential for more, so why borrow?

Did they really raise enough tax? Anyways, the objective of the loan has reported is to finance construction of pipelines. QED. I dont think it falls under the objective/course of tax payments. . .

Wowww, That's alot of Money to be borrowed and to render poor governance in return. Disgusting people.

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Is this President daft or something?
Is the laying of pipeline our national priority at this point in time. Pipeline for what?
No light, no road, no water, no affordable housing, security zero, healthcare zero, unemployment soaring.
Why plunge the country into further debt? I thought OBJ claimed Nigeria is free from debt.
Please this man should just resign and allow capable hands to take over the administration of this country.
I am fed up.

Who cares about the future of Nigeria, just keep borrowing and many can keep stealing with properties in Dubai and around the world.

@akinnux how would you get steady light without the pipeline for the gas . ode , you think the model light supply base on old model dam . The new generation light go along with the pipeline for the gas supply

Borrowing from islamic bank?
Another advise from pro-islamic banking SLS?

There is nothing wrong in borrowing if the loan is invested.

Besides, so we are owing only $5b at the moment? Why did subsidy protesters make it look
as if our external debt profile had risen in excess of maximum limits?

Secondly, why is Daily Trust newspaper sounding it in our ears that the loan is
from Islamic Development bank? afterall, only $600 million out of the total $7.9 billion
loan sum is to be sourced from the so-called Islamic Dev Bank. I suspect this pro-muslim north newspaper.

make una no vex

scribble:

the OP must be silly or Daily Trust has some illiterate journalists, the FG is borrowing not for construction of pipelines. Jeez go to Thisdaylive.com, Punchng.com, Businessnews.com.ng etc

the 7.9 billion US is for projects in the pipeline, its a figure of speech, now taken to mean another thing entirely and here is OP in conjunction with Dailytrust.com.ng misinforming thousands of Nigerians unlucky enough to visit their site or this front page article,

Daily Trust office is somewhere around Utako District in Abuja Metropolis
opposite ABC transport Plc. The kind of Almajiri Aboki journalists you
meet there will discourage you from taking that newspaper serious.

Goddex:

There is nothing wrong in borrowing if the loan is invested.

Besides, so we are only owing $5b at the moment? Why did opposition make it look
as if our external debt profile had risen in excess of maximum limits.

Secondly, why is Daily Trust newspaper sounding it in our ears that the loan is
from Islamic Development bank? afterall, only $600 million out of the total $7.9 billion
loan sum is to be sourced from the so-called Islamic Dev Bank. I suspect this pro-muslim north newspaper.

There’s nothing wrong in borrowing money for capital projects but -

1. Are there any guaranties that the pipelines won't be re-vandalized once fixed?
2. The external debt is $5b but what is the internal debt (money owed by states)?
3. Why can't the surplus money earned from the present high crude oil price be used to finance the project?
4. How is the money going to be paid back?
5. What happens if the price of crude oil crashes?

@goddex , becos if GEJ and iweala sees no problm  accepting  an advice from SLS about borrowing from islamic development bank, then y shld u worry about having one in the country.
GEJ needs more money for transformatiob plans, that's noted, will wait and see. The best I can do is to be a law abiding citizen.

hmmm. That figure looks familiar

Seun:

They raised enough tax to pay for the entire budget last year, with the potential for more, so why borrow?

@Seun
No, you are wrong. The tax reforms actually crashed the tax.
My organisation started implimenting the new tax regime last
month and my tax crashed by half.

This is madness, we all watched the presentation of GMD -NNPC during House of Reps probe of Fuel Subsidy Payments. The man expressed his frustration on security of pipelines, that Shell had abandoned several pipelines as a result of persistent vandalization. He futher asserted that even when you arrest any of the vandals, the police will release them the next day. GEJ Administration has not addressed the security issues, he just want to buy pipes with borrowed funds. We are going back to the streets if try anything of such.

akinnux:

Is this President daft or something?
Is the laying of pipeline our national priority at this point in time. Pipeline for what?
No light, no road, no water, no affordable housing, security zero, healthcare zero, unemployment soaring.
Why plunge the country into further debt? I thought OBJ claimed Nigeria is free from debt.
Please this man should just resign and allow capable hands to take over the administration of this country.
I am fed up.

Bros, i am sorry but u r d daft person here. Hw do u generate power without pipelines to supply gas to power d turbines?
Sorry bro, but nxt time u dnt undstnd a topic dnt comment cus u r already 'fed up'

niddamugu:

hmmm. That figure looks familiar

Sure, fuel subsidy brouhahaha

@Topic.
Thats quite alot off cash, hope it will b invested properly n d pipelines secured frm further vandalism.

Jimmy Boy:

This is madness, we all watched the presentation of GMD -NNPC during House of Reps probe of Fuel Subsidy Payments. The man expressed his frustration on security of pipelines, that Shell had abandoned several pipelines as a result of persistent vandalization. He futher asserted that even when you arrest any of the vandals, the police will release them the next day. GEJ Administration has not addressed the security issues, he just want to buy pipes with borrowed funds. We are going back to the streets if try anything of such.

Before you attack GEJ, let me ask you how you intend to carry gas? If all the pipelines were vandalized, will you now transport gas on trucks? How come you still get power from turbines powered by gas!

MAke una dey think before una type

rolchi:

Before you attack GEJ, let me ask you how you intend to carry gas? If all the pipelines were vandalized, will you now transport gas on trucks? How come you still get power from turbines powered by gas!

MAke una dey think before una type

What happens if he builds the pipelines and they get vandalized again? You end up in square one with billions of dollars in debt!

The issues causing the vandalism need to be addressed before building another pipeline!

Actually 0.3trillion naira will be used to finance SURE P while 1 trillion naira will end up in various individual oversea accounts, GEJ and Patience accounts inclusive. Rogue administration wants to put us back into debt that OBJ painstakingly erased and my brothers from the South South and South East are telling us it is just 5 billion + 8 billion dollars. They have forgotten that was how it was borrowed little by little in the past until it reached over 30 billion dollars. As you're laying the pipes in your dream, the vandals are also waiting for you to leave. Any government that can't fight corruption in Nigeria will never succeed.

No future for this naija project.

more money to share.

i pity any one hoping on naija govt

Nigerians, I'm very sorry for you people O! GEJ is about to increase the country's external debt by 141% simply for 'completion' of pipeline projects and there are some morons justifying this.

If he needs $8 billion for pipelines projects in the final stages of completion, then how much was spent on the pipelines projects entirely? $80 trillion??! How can any President justify spending 30% of the country's annual budget on pipelines?! Na gold dem use do the pipes?! Na Russia e wan connect the pipes to?!

This is the same reason why the Greeks are going insane all over the place, and here we are, with some even lauding this broaddaylight theft. The President didn't even specify which pipelines he needs more than 30% of the annual budget for. If 70% of our budget is for Recurrent Expenditure, and 30% is for completing pipelines projects, then it means there's nothing left. Shall Nigerians live by pipelines alone?!

thats the modus operandi of a corrupt official, they never go into specifics so that when the shady deal comes under limelight,they wud be able to inject useless premisses to justify their conclusion. sorry naija

Upright750:

@akinnux how would you get steady light without the pipeline for the gas . ode , you think the model light supply base on old model dam . The new generation light go along with the pipeline for the gas supply

Funkymallam:

Bros, i am sorry but u r d daft person here. Hw do u generate power without pipelines to supply gas to power d turbines?
Sorry bro, but nxt time u dnt undstnd a topic dnt comment cus u r already 'fed up'

Sure, fuel subsidy brouhahaha

@Topic.
Thats quite alot off cash, hope it will b invested properly n d pipelines secured frm further vandalism.

I can the President Jonathan has a lot of attack dogs here who are ready defend his decisions, no matter how daft. I am not opposed to building pipelines for gas but why can't we raise this fund internally. I certainly do not accept putting Nigeria into eternal debt because the debt burden would further impoverished the long suffering Nigerians.

As much as i abhor the security apparatchik of this nation, the poster said [color=#990000]GAS pipelines, there has not been cases of Sabotage on gas pipelines, don't type because your fingers itch.

the few cases of gas pipeline vandalism were done in error where most times the ROW of condensate, crude and gas interchange and the criminals get confused once they hit a gas line they curse and walk away, so security is not the issue here once properly labeled.
export gases are delivered at very high pressures not your everyday macabre dance.

other forms of vandalism that comes to gas pipelines are mere pitting (a type of corrosion) due to poor maintenance (CP and IP). so, most times the pipelines burst on their own after operating for several years.

also there are cases where companies transport condensate through gas lines, in operation terms, its designed with the MAOP of gas lines but it transports condensate, once those criminals get the info, they burgle it for condensate not necessarily gas.

Navigation is another serious concern most captains are high, they hardly read signs so they anchor carelessly those anchors tend to cause great damage to pipelines.

Vandals like Mend may burst them as mere economic sabotage but those cases are on the low side,
make no mistakes, the real bunkery guys are professionals not some street urchins, the urchins have all gone with pipeline explosions of the past.[/color]

Goddex:

@Seun
No, you are wrong. The tax reforms actually crashed the tax.
My organisation started implimenting the new tax regime last
month and my tax crashed by half.

NO SIR, because the tax of your organization crashed by half does not mean that the total tax revenue accrued to the FG has crashed. the objective of tax reforms is to remove impediments to tax payment so that more organizations/individuals will pay correct taxes and revenue will increase. The tax reform is targeting greater number of tax payers, not higher individual taxes. one of the ways to minimize the apathy to tax payment is to remove multiple and arbitrary taxation as much as possible. this will curb tax evasion and other sharp practices and of course, raise tax revenues.

nex:

Nigerians, I'm very sorry for you people O! GEJ is about to increase the country's external debt by 141% simply for 'completion' of pipeline projects and there are some morons justifying this.

If he needs $8 billion for pipelines projects in the final stages of completion, then how much was spent on the pipelines projects entirely? $80 trillion??! How can any President justify spending 30% of the country's annual budget on pipelines?! Na gold dem use do the pipes?! Na Russia e wan connect the pipes to?!

This is the same reason why the Greeks are going insane all over the place, and here we are, with some even lauding this broaddaylight theft. The President didn't even specify which pipelines he needs more than 30% of the annual budget for. If 70% of our budget is for Recurrent Expenditure, and 30% is for completing pipelines projects, then it means there's nothing left. Shall Nigerians live by pipelines alone?!

Nicely said,
i wld never understand why people justify corruption.
if he was still gonna borrow and plunge us into debt, why did he partially 'remove' subsidy?