DBN: Osinbajo seeks approval for additional $1.2bn external loan

…As FG, states, LGAs share N415.7bn

From Uche Usim, Abuja

Acting President, Yemi Osinbajo, is seeking approval of the House of Representatives for $1.280 billion loan for the Development Bank of Nigeria (DBN).

He said the DBN is ready to commence operation while the four foreign banks involved will commence the disbursement of the loan.

The Acting President is also seeking the approval of €9 million for agricultural financing to consolidate the gains of the first tranche of €10.5 million. He sent the requests as an addendum to the 2016-2018 external borrowing plans.

Osinbajo, whose letter dated May 16, 2017, was conveyed to Speaker, Yakubu Dogara, in the Vice President’s seal and letterhead but signed with the designation of the Acting President, said the DBN was approved by the last administration but the loan facility was strangely omitted in the 2014/2016 borrowing plan by the National Assembly.

The letter reads: “The Development Bank of Nigeria (DBN) is a multi-donor supported bank approved under the previous administration with the financing agreement executed on February 25, 2015.

“However, the facility in the sum of $1.28 billion appeared to be inadvertently omitted in the 2014/2016 external borrowing plan approved by the National Assembly.

“The bank is being supported by the World Bank, African Development Bank, KfW Development Germany and French Development Agency in the sum of $500 million, $450 million, $200 million and $130 million respectively.

“The bank is ready to commence operation and the donors are also ready to commence disbursement consequent upon National Assembly approval of the borrowing.

“Furthermore, Fund for Agricultural Finance in Nigeria (FAFIN-11) is being supported by KfW Development Bank of Germany in the sum of €9 million. The first phase of (FAFIN-1) was €10.5 million and the financing agreement was executed on October 3, 2013.

“It is an investment facility in agricultural financing. The first tranche of FAFIN-1 has been fully disbursed and the donor is ready to provide another tranche of €9 million for FAFIN-11. The second tranche is for the consolidation

Meanwhile, the Federal Government, states and the 774 Local Governments Areas Tuesday shared about N415.73 billion for the month of April 2017, the Federal Accounts Allocation Committee (FAAC) has said.

Speaking at the end of a meeting of FAAC’s Technical Sub-Committee in Abuja yesterday, the Accountant General of the Federation (AGF), Ahmed Idris, said the April figure showed a negative variance of N52.077 billion when compared to N467.807 billion that was shared in March.

According to him, refund from the Nigerian National Petroleum Corporation (NNPC) stood at $6.33 billion, while the balance of the Excess Crude Account (ECA) as at May 23 stood at $2.299 billion.

Idris said the Petroleum Profit Tax (PPT) was $67 million, while the gross statutory revenue of N274.110 billion received for April was lower than N331.583 billion received in the previous month by N57.473 billion.

“We have seen stability in price of crude oil and peace in the Niger Delta. Again, we have put fiscal measures in place to improve revenue and the future is bright. We are seeing the positive indices in these steps. We expect spike in revenue improving despite this shortfall and we hope to see better performances going forward having improved the revenue generating agencies’ capacity and propensity,” he said.

In his remarks at the briefing, Yunusa Mahmud, Chairman of State Commissioners of Finance, said the shortfall in the April figure was saddening. He, however, expressed optimism that revenues will improve going forward with the assurances of the AGF.

“The figures are looking bright though we are not happy about the shortfall. But we have been assured of improvement as oil price and production are stable. States need support from the Federal Government but that is not to say the states are not doing anything.

Many states are looking inwards and improving revenues,” he said.

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