Buhari, Senate in fresh row over N4.2tr bond request

Strong indications emerged over the weekend that the National Assembly leadership, specifically the Senate, and President Muhammadu Buhari, may be heading for a fresh face-off, over the lawmakers resolve to reject N4.2 trillion bond request by the executive.

Signs of a likelihood of a clash emerged just before lawmakers headed for their Easter break when it became clear they might be heading for an outright rejection of the bond request.

Buhari had in separate letters to the two chambers of the National Assembly read at the House on Tuesday, March 27 and in the Senate on March 28, requested for an approval for a fresh N4.2 trillion bond.

But lawmakers at the Green and Red Chambers were said to be unhappy that the executive had failed to render accounts of the over N9.2 trillion loans or bonds approved by the National Assembly since 2016.

Some lawmakers who spoke in confidence, told newsmen that the “sins” being counted against the latest loan request are multifaceted, leading to what they described as a near consensus feeling that the request be thrown out.

According to lawmakers, one of the Executive’s perceived sins was why the President would forward such a request without prior discussions with them.

A lawmaker said, “there is a feeling among Senators and House members that the President was treating them with contempt if not with disgust on key national issues.”

He said the sin is the fact that the nation’s procurement law mandates the government to only borrow money for capital expenditure and the lawmakers are claiming that the bond appears as a way of raising money to finance recurrent expenditure.

Buhari had in the letter titled, “Request for the Establishment of a Promissory note Programme and a Bond Issuance to Resettle Inherited Local Debts and Contractual Obligations,” that though Section 41 (1a), 44 (2b) of the Fiscal Responsibility Act (FRA) that proceeds of borrowing by government at all tiers shall be applied solely towards capital expenditure, his government had in August 2017 proposed amendments to the FRA.

The letter gave further insights to the borrowing plans: “The promissory note and bond issuance programme has become imperative to clear these obligations, which include unpaid obligations to pensioners, salaries and promotional arrears of civil servants, obligation to petroleum marketers, contractors and suppliers debt, unpaid power bills and obligation from tariffs reversal in 2014, export expansion grant IMBET, judgment debt and refunds to state government for projects undertaken on behalf of the Federal Government.”

Senators and members of the House are, however, said to be unenthusiastic about breaching the FRA, especially as the requested amendment by Buhari has not been effected.

In 2016, the National Assembly had initially turned down a $5.5 billion loan request as the two chambers declared that a mere two page letter cannot explain in details such huge borrowings.

The South East caucus in the National Assembly also took offence that none of the projects to be covered by the borrowing was sited in the zone. The loan was later considered after the President provided details in 2017.