Protest as Senate okays $10m loan for Sao Tome and Principe
From Azimazi Mommoh-Jimoh, Abuja
THE Senate yesterday approved President Umaru Musa Yar' Adua's request for a $10 million loan to the Democratic Republic of Sao Tome and Principe, despite protests by many senators, who frowned at the proposal in the light of infrastructure decay in Nigeria.
A recommendation that the request be approved had been submitted to the Upper Legislative Chamber by the Senate Committee on Finance, which had considered it.
Chairman of the committee, Senator Mohammed Ahmed Makarfi, said that the members observed that the loan would be in the best economic interest of Nigeria.
Makarfi said the Debt Management Office (DMO) had convinced the committee as to why Sao Tome deserved the loan.
He said: "The Director-General of the Debt Management Office explained that Nigeria's assistance to Sao Tome and Principe, a strategic maritime neighbour, which is anchored on the framework of the Joint Development Zone, will strengthen security in the Gulf region, taking into account the geo-politics of international oil crises and economic interests of Nigeria."
He added that acceding to the request would further enhance the leadership status of Nigeria on the continent of Africa.
But Senator Heineken Lokpobiri (Bayelsa State) opposed the granting of the loan, stating that, "We do not know whether Nigeria is a Father Christmas that is giving out loans without interest. Even when we take loans from the World Bank or IMF, there is always an interest to pay."
Also contributing to the debate on the matter, Senator Smart Adeyemi (Kogi State) declared: "I believe that Nigeria should be a big brother in Africa, but I also believe that this is not the time to grant such loans. This is the time when our power sector, railway system and the entire infrastructure are down. If we are giving a loan, it has to be on a business basis. I do not know the conditions attached to this loan. There must be interest attached. It must not be at the expense of our people."
Senator Grace Bent (Adamawa State) said the loan was "uncalled for" because Nigeria's assistance to many African countries was never reciprocated.
She said: "I am worried that when the chips are down, these countries that we have assisted, what do they do at the end of the day? We did so much for South Africa, Liberia and so on, when it is time for them to support Nigeria, we don't get their support. I am talking about the UN seat. A lot of African countries have been going behind to lobby for the seat. None of them have come forward to support us. We need to see the agreement of the loan and something should be attached to it. It should not be free. We are not a financial institution."
In seeking approval for the loan, Yar'Adua had explained: "Sao Tome and Principe has a previous record of prompt repayment as was evidenced in the case of a similar loan of $15 million, granted between 2002 and 2004. The loan was fully repaid according to the terms of the loan in April 2007. Repayment will be from the Production Sharing Contract (PSC), in respect of the JDZ oil concessions, in which there are revenues from signature bonuses, sales of seismic data, royalties and taxes. By the nature of the request, especially the emergency that the DRSTP faces and considering the relationship between Nigeria and DRSTP, the soft loan would be interest-free, while the loan would be repaid within four to six years."
