The Senate Committee on Foreign and Domestic Debt has described efforts made by some states in the northern part of the country to secure loan from the Saudi Arabia- based islamic bank in disregard with Nigeria’s extant law as grossly illegal.
The Chairman of the committee, Senator Shehu Sani, pointed out that the extant laws required any government or agency of government that wants to secure a foreign loan to first secure the support of the Federal Government pointing out that the governors cannot just go to Saudi Arabia to solicit or collect loans without following the due process of law.
“The action of the governors ran contrary to the relevant provisions of the Act that clearly and unambiguously rest the exclusive right to borrow externally on the federal government.
“The Debt management office Act 2003, section 21 and external borrowing guidelines, 2008-2012, paragraph 2.1 clearly states that any government or its agencies can only obtain external loan through the federal government and such loans must be supported by the federal government guarantee. The act is explicitly clear that no state, local government or federal agency shall on its own borrow externally.
