Nigerian lawmaking body rejects World Bank loan

19:32, December 10, 2009      

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The Nigerian House of Representatives has rejected the 300 million U.S dollars fresh World Bank soft loan which the Federal Executive Council ratified on Nov. 11, declaring it null and void, the Punch reported on Thursday.

In a resolution at Wednesday's session in Abuja, the House said President Umaru Yar'Adua's administration did not follow due process in sourcing and approving the loan.

The House said the loan was approved without the knowledge of the National Assembly, in clear breach of the 1999 Constitution and the Debt Management Act.

The administration had earlier taken a loan of 500 million dollars, which it used as part of the funding of the 2009 budget.

Dino Melaye, a member of the House, said in a motion calling for the rejection of the loan that its implementation schedule would run from Nov. 23, 2009 to Nov. 2014, with a moratorium of 10years and a repayment period of 40 years.

Melaye expressed concern that barely five years after Nigeria exited the Paris Club of creditor nations, the country was gradually returning to another debt trap.

The lawmaker argued that the government took the loan because it must have reasoned that it would be repaid from crude oil sales proceeds.

He added that meetings at the World Bank' Office in Washington DC and Abuja, where the loan was discussed, were attended by the ministers of finance, justice, power, representatives of the Debt Management Office and the Power Holding Company of Nigeria.

Speaking in the same occasion, Femi Gbajabiamila, the minority whip of the House, said the government had no powers to spend one kobo out of it without appropriation by the House.

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