President Goodluck Jonathan yesterday asked the National Assembly for approval to take $7.9 billion (equivalent N1.256 trillion) foreign loans to finance construction of pipelines.In separate letters to the Senate President and the Speaker of the House of Representatives, presented to lawmakers yesterday, Jonathan said the funds would be used to complete the projects through 2014.Jonathan did not specify which pipeline works he aimed to finance with the loans, which are to be sourced from the Islamic Development Bank and other institutions.The new loans, to be included in the medium term external borrowing plans for 2012 to 2014, would shoot up Nigeria's external debt to $13.5 billion.According to the Debt Management Office, the country's foreign debt stock as on December 31 was $5.666 billion, having risen from $4.578 billion a year earlier.It was not immediately clear whether the construction to be financed with the new loans would be for natural gas or oil pipelines, and there was no immediate explanation from the government.But Jonathan said the projects were meant to put the economy on track through growth and development, in line with his so-called transformation agenda.'The pipeline projects are at various stages of finalisation. Therefore, I present herewith a total pipeline borrowing in the amount of $7, 905, 690.00 or $2.64 billion a year being cumulative facilities offered by the World Bank, African Development, Islamic Development Bank, Exim Bank of China and Indian Lines of Credit,' he said in the letter.Last week, Minister of State for Finance Yerima Ngama announced that government was in talks with the Islamic Development Bank for a $600 million loan, intended for 'investment in social infrastructure and power like the provision of turbines for the Zungeru power station.'This is aside an earlier $300 million loan already taken from the same bank.Ngama said the facilities would also be used for the construction of health centres; urban and rural water works; housing; and rehabilitation of some state universities.Nigeria became a member of the Islamic Development Bank in 2005, and holds a $30 billion authorised share capital and an equity stake of $2.28 billion or 7.6 per cent in the bank.Among pipeline projects the government is known to be involved in are the Trans-saharan Gas Pipeline project, replacement of 2500 kilometres of vandalised petroleum pipelines, Calabar-Umuahia-Ajaokuta gas pipeline estimated at $790million, Ajaokuta-Abuja-Kano pipeline estimated at $1.5billion, and the Gas Master Plan which will cost about $5million.The Federal Government had said approximately 2,500km of petroleum products pipelines have been vandalised in the southern, north central and north eastern parts of the country, resulting in the movement of fuel products by trucks.Government said the re-instatement of these pipelines will improve availability of petroleum products across the country, eliminate bridging and reduce highway maintenance costs.Since assuming office in February 2010 as acting president, Jonathan has been taking Nigeria into further external and internal borrowing to finance government projects, starting in April 2010 when he asked the National Assembly to approve a $950 million World Bank loan.Trends in Nigeria's external debt stock over the five-year period which ended 2010, revealed a gradual increase, with the highest annual increment of 15.21 per cent in 2010, according to the 2010 annual report and statement of account of the DMO.This is coming few years after Nigeria exited the Paris Club in 2005 when $18 billion of its debts were cancelled while the government bought back $12 billion.Addressing journalists after Senate's plenary session yesterday, Senate spokesman Enyinnaya Abaribe (PDP, Abia) said the new foreign borrowing was not implying that the nation was broke.'It has nothing to do with Nigeria being broke. We will get more details when we debate it on the floor of the Senate. We might accept or not depending on the way the debate goes,' Abaribe said.
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