Posted by From Kunle Aderinokun in Abuja on
Finance Minister, Ngozi Okonjo-Iweala has said President Olusegun Obasanjo would this week meet with the 36 governors to get their approval on the use of excess crude proceeds to pay the remaining $12 billion debt owed to the Paris Club by Nigeria.
Finance Minister, Ngozi Okonjo-Iweala has said President Olusegun Obasanjo would this week meet with the 36 governors to get their approval on the use of excess crude proceeds to pay the remaining $12 billion debt owed to the Paris Club by Nigeria.
The Paris Club of creditors, to which Nigeria owe about $30 billion granted the country a debt relief of $18 billion on June 29. The Federal Government expressed its plan to offset part of the remaining $12 billion using the excess crude proceeds. But the government then added that the decision to use the excess crude fund would be subject to approval of the Council of State, which included the governors amongst others.
Okonjo-Iweala told THISDAY at the weekend in Tunis, 'I believe the President would be meeting with the governors very soon. They have to be involved in the discussion. I'm aware there is a meeting next week (this week) and I'm aware this would be taking off at that meeting."
Okonjo-Iweala said, the September date for the signing of memorandum of understanding (MOU) with the Paris Club still holds and that implementation of the agreement, that is payment of the $12billion debt, would start immediately after.
On the plans by the administration to check borrowing during and after its exit, from office, Okonjo-Iweala said already the Debt Manage-ment Office (DMO) has put a law in place which prohibits states from taking external loans.
By the law, the states can also not secure loans domestically without recourse to the Federal Government. She added that the government has also sent the fiscal responsibility bill to the National Assembly, which is very strict on the issue of borrowing.
'I think that what happens after 2007 is that there would be legislation in place. And as you know there is a DMO law, which states that the states cannot just go out and take an external loan as they used to do before. Even for domestic borrowing, they still have to come to the Federal Government to discuss and look at certain parameters, then the DMO legislation. In the fiscal responsibility bill, we've also included a section on this issue of borrowing, all designed to make sure that we don't enter into the same kind of situation that we were in. and again, that is why we call on Nigerians to support the fiscal responsibility bill because this bill is going to help us to keep transparent budgeting, keep from borrowing excessively, and borrowing at rate that are not favourable to the country.
'We are hoping that the National Assembly would pass the bill but the National Assembly represents Nigeria. If Nigerians show overwhelming support for the bill, then National Assembly would move along with it. So we also have a responsibility as each and every individual Nigerian to support the bill. We've had many workshops where we talked to stakeholders, we expose the bill, and we handed out copies of the draft legislation so that people could look. We've opened up website for comments for about a month. We got many comments, that in fact delayed the bill going to the National Assembly because we wanted to integrate comments we got from Nigerians and we've done that."