Senate cautions federal govt, states over loans
HOUSE of Representatives Committee on Works on Monday lamented that in spite of the N1.414 trillion appropriated for the road sector since 1999, the roads have remained more dilapidated than they were before 1999.
And as states begin fresh moves for foreign loans amounting to about $9.79 billion, the Senate on Monday expressed concern, saying if the scramble for loans is not checked, Nigeria might be plunged into another era of heavy debts.
Works Minister, Mike Onolememen, declared that the Federal Government would need to spend a total of N2 trillion in four years to fix the dilapidated roads in the country.
At a four-day stakeholders' public hearing tagged, "Urgent Need to Address the Near Total Collapse of Federal Roads Across the Country," Chairman of the panel, Ogbuefi Ozomgbachi, said that, "between 1999 and 2012, the National Assembly had appropriated about N1.414 trillion for the road sector.
"And yet, out of about 34,400 Km of federal road network, only about 35 per cent is paved and substantial percentage of it in varying degrees of distress and or are potholes-ridden"
In a speech, Onolememen said the poor state of roads was due partly to poor funding. According to him, "the financing of road projects has been through fluctuating budgetary provisions, which have proved inadequate to fund the projects.
"For example, the amount being owed on Interim Certificate for the Lagos-Otta highway is about N1.74 billion, yet only N742.5 million was provided in the 2012 appropriation. This often leads to delays and abandonment of road projects across the country.
"From past experience, budget provisions are not fully released. In 2011, out of a budgetary provision of N130 billion for highway projects, only N88.7 billion was released, with a shortfall of N41.3billion. And in 2012, out of a total budgetary provision of N143 billion, only N110 billion was released.
"The average budget of about N100 billion for road development is grossly inadequate for the nation's 35,000 km of federal road network and for a country that budgets N300 billion and N150 billion for its Central Bank and Deposit Insurance Corporation respectively."
The World Bank has made available $9.79 billion foreign loan for state and federal governments to borrow to execute some projects that would touch the lives of Nigerians. The executive arm has asked the Senate to approve its request for a loan of $4,846.3 billion while some state governments are seeking approval for a loan of $3,059.39 billion.
At a meeting between the Senate Committee on Local and Foreign Debts and state governments held in the National Assembly yesterday, some states gave "urgent need to touch the lives of the people" as their reasons for the requests.
Baffled by the requests for huge loans, however, the committee warned the participating states on the consequences. Speaking at the forum, the committee, through its chairman, Ehigie Uzamere, recalled that Nigeria was at a time held by burden of loans before she exited in 2005.
"Let me state here that there is no need for any state to over-borrow," he said. "You people are looking at the time. Ten years period is like 10 days, so you have to be careful. It has been a painful experience for us as a nation. Many states were not able to pay their debts.
"I can see many of you asking for so much. We don't want our children to be in bondage. We know the consequences. It is sad the way we are going. We are taking this thing seriously so that our children will not suffer, and let me also tell you that we will visit the states to see the level of performance."
