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Governor Ayodele Fayose of Ekiti State has taken his disagreement with President Muhammadu Buhari to the Chinese Government, urging the Asian country not to grant the $2 billion loan being sought by the federal government of Nigeria.
In a letter dated April 12, 2016, Fayose said that as a major stakeholder in the Nigerian project, it would be unwise for the country to take additional external loan considering the fact that 25 per cent of the national annual budget is being used to service debts.
He argued that the negative impact of servicing any additional foreign loan on the economy would be “better imagined than experienced”.
The letter with reference number EK/GOV/28/10, was addressed to President Xi Jinping of China and delivered by Chief of Staff to the governor, Barrister Dipo Anisulowo in Abuja on Thursday, through the Chinese Ambassador to Nigeria, Gu Xiaojie.
Anisulowo, who was accompanied by Deputy Speaker of the State House of Assembly, Hon Segun Adewumi, Chairman House Committee on Information, Gboyega Aribisogan, Chairman House Committee on Health, Dr Samuel Omotosho and Special Assistant to the Governor on Public Communications and New Media, Lere Olayinka, said Governor Fayose, who is currently in China, will also deliver a copy of the letter directly to the Chinese President.
The letter read in part: “I write as one of the major stakeholders in the project Nigeria, and a governor of one of the federating units making up Nigeria, to draw your attention to report that the Federal Government of Nigeria is on the verge of obtaining a $2 billion loan from the Export-Import Bank of China.
“This $2 billion loan is part of the N1.84 trillion the Federal Government of Nigeria has proposed to borrow to finance the 2016 budget, which is yet to be signed by the President, Mohammadu Buhari owing to unending controversies between the Executive and Legislative arms of government.
“According to reports, Nigeria desires to raise about $5 billion abroad to cover part of its 2016 budget deficit. This is projected to hit N3 trillion ($15 billion) due to heavy infrastructure spending at a time when the slump in global oil prices has slashed the country’s export revenues.
“While conceding that all nations, especially developing ones need support to be able to grow because no nation is an island, I am constrained to inform you that if the future of Nigeria must be protected, the country does not need any loan at this time.
“The government of China should be mindful of the fact that Nigerians, irrespective of their political and religious affiliations are totally opposed to increment of the country’s debt burden, which is already being serviced with 25 per cent of the Federal Government annual budget.
“It will interest the government of China to know that some of the projects for which the loan is being sought are not captured in the controversial 2016 budget, which has been sent to the President by the National Assembly for his assent. For instance, the Lagos – Calabar Rail project was not included in the budget proposal the President presented to the National Assembly and it was not included in the Appropriation Bill passed by the National Assembly.
“Most importantly, Nigeria is presently servicing debt with about 25 per cent of its annual budget and what will happen to the economy in 2017, when the country will begin to service the additional debt to be incurred this year is better imagined than experienced.
“The Chinese government must also be aware that some western nations approached by the Federal Government for loan diplomatically and cleverly declined.
“This must have been informed by the suspicion in the present government’s capacity to salvage the nation’s economy as well as the sincerity in the fight against corruption. More so that Nigeria’s Foreign Reserve, which is the only guarantee for foreign loan has declined to a very uncomfortable level”.