The Niger Delta Budget Monitoring Group (NDEBUMOG) has raised concerns over a proposed government loan agreement between Nigeria and São Tomé and Príncipe. Nigerian president Umaru Musa Yar’Adua has suggested a US$10 million loan be granted to São Tomé and Príncipe “to assist the government [to] address some socio-economic difficulties in the country.” NDEBUMOG worries not only about the loan’s vague purpose but also over the lack of oversight characteristic of past loan arrangements between the two nations.
President Yar’Adua insists this is a sound investment for Nigeria, citing São Tomé and Príncipe’s prompt repayment of a US$15 million Nigerian loan in 2004. But NDEBUMOG isn’t as sure. The organization doubts that monitoring of São Tomé and Príncipe’s repayments was ever completed: “[have] members of the [Nigerian] National Assembly ever set their eyes on such agreement…?” Lack of transparency into government information is an ongoing concern in Nigeria, where a draft Freedom of Information Act has been sitting in the Assembly for 10 (yes, ten) years. NDEBUMOG is calling on the National Assembly to demand some type of budgetary monitoring mechanisms be included in the agreement before the loan is approved.
NDEBUMOG’s argument that the Nigerian National Assembly can provide effective, independent oversight of the loan may be somewhat of a stretch, however. The Global Integrity Report: Nigeria highlights how the Nigerian Assembly lacks the knowledge or capacity necessary to provide adequate budgetary oversight. Even more damning is the recent 2008 assessment of the Nigerian budget process by our friends at the International Budget Partnership; Nigeria scores a paltry 19 out of 100 in providing adequate budget documentation and budget transparency to the public. Yikes. NDEBUMOG also reminds us that many Nigerian legislators are invested in the oil industry itself, presenting a conflict of interest in the typically oil-centered Nigeria-São Tomé and Príncipe loan agreements.
Building the capacity of Nigerian legislators to provide some baseline level of effective budget monitoring (as well as improved safeguards to minimize obvious conflicts of interest) must be implemented if there’s any hope of the proposed loan being serviced in an above board manner.
— Norah Mallaney
NDEBUMOG’s PRESS RELEASE
THE NATIONAL ASSEMBLY MUST NOT GIVE APPROVAL TO THE $10 MILLION (USD) LOAN FOR SAO TOME AND PRINCIPE.
Recently, the Presidency informed and request the National Assembly for approval of the above amount as repayable loan to STP.
This is very saddening and worrisome, going by the fact that, Nigeria is yet to present report(s)concerning the Production Sharing Contracts (PSC) between our country and STP in the Joint Development Zone (JDZ), which is being operated by both countries to the National Assembly. We know Nigeria’s National Paliament isn’t pro-poor nor (pro)active, hence asking for such may not readily come into their mind.
The government says “the loan is repayable and can be recovered” going by the (PSC) extractive agreement(?) between both countries in the Gulf of Guinea. Sincerely speaking, this is a brainwave as a way of stimulating the pro-rich National Assembly in Nigeria to grant the approval. How can the legislature grant approval based on distorted facts of the so called PSC in the JDZ? Has members of the National Assembly ever set their eyes on such agreement nor situate their (oversignt) thinking if (either) oil extraction from the JDZ is on Cost or Profit Oil to Nigeria? What is the implication for Nigeria if on Cost Oil? And how many years are the recoverable Wells in the PSC for Nigeria?
NDEBUMOG has consistently advocated for the establishment of the Joint EITI between both countries, but we are yet to be sure government is willing to buy this idea. We are aware the Nigerian Extractive Industries Transparency Initiative (NEITI) has set a machinary towards this, but until it comes to fruition (with the media and Civil Society integrated from both countries) before we can take the government serious.
Given loans and taking more loans is becoming a trade mark of this government of a wobbling giant, who even, cannot feed its population nor provide social security for the country. Clearly, the Yar’Adua government is moving fast to rejoin the World Bank Club of creditors from one loan ( and grant(s) to the other which the government is already beggerly soliciting from IDAs,yet, same government want to loan another Country.
We say NO, on the proposed loan to STP and urge the National Assembly to throw-out the proposal.
NDEBUMOG Regional Accountability Centre: