Two high ranking ministers, Rotimi Amaechi of the transport ministry and the Minister for Finance, Kemi Adeosun, are currently at loggerhead on the use of the controversial $5.5 loan expected from abroad soon.
While Amaechi is insisting that the expected loan would be used to fund power projects and rail projects, Adeosun, on Wednesday said the loan would be used in refinancing the legacy debts of the immediate past administration.
Recall the Minister of Transportation, Mr. Rotimi Amaechi had earlier told the Nigerian Senate that the loan would partly be used to fund power projects, the remaining; up to $2.5bn will go into the completion of some remaining rail projects.
Amaechi explained that half of the loan will make part of the multi billion naira upgrade of the nation’s power sector from next year and delivery of Kano-Kaduna, Itakpe, and other railway contracts.
But in what looks like a twist, the Minister of Finance, Mrs. Kemi Adeosun, on Wednesday, stated that the Federal Government would apply the sum of $3bn in refinancing the legacy debts of the immediate past administration.
Adeosun had appeared on a television programme in Abuja, saying the proposed $5.5bn loan was made up of refinancing of heritage debts to the tune of $3bn and new borrowing of $2.5bn for the 2017 budget.
Whereas no effort had been made by any department of the government or any of the ministers to explain why both were on different pages on the matter, Adeousn only maintained that the 2017 budget was facing liquidity problem, which formed part of the reasons for the new loan request from the international financial market.
In a newer twist from the same Minister of Finance, she added that apart from using the fund to drive remaining part of the 2017 budget, the other reason was to get $3bn to refinance part of the domestic debt incurred by the government of President Goodluck Jonathan.
In her presentation, under Jonathan, the country’s debt rose from N7.9tn in June 2013 to N12.1tn in June 2015 despite the fact that “only 10 per cent of the budget was allocated to capital expenditure when oil price exceeded $120 per barrel.”
Already, as at less than three year, the debt profile of the current administration seems to be shutting out of control as the World bank had warned if approaching limits of unmanageable borrowing.