Govt begins tracking of foreign loans’ management




The Federal Government has flagged-off the tracking of all foreign loans secured by it. The move is to ensure that the credit facilities are channelled to purposes they were meant for, to achieve value for money.Currently, an estimated $4.23 billion has been secured by the Federal Government, which recentlyexpressed concern on the poor implementation and administration bottlenecks that have negatively impacted on projects across the country.


The Minister of Finance, Mr. Olusegun Aganga, explained that government is determined to effectively address these challenges and would spare no effort at ensuring transparency, accountability and value for funds in the execution of all donor assisted projects and programmes.He made the pledge at the weekend, while addressing a two-day 2010 Country Portfolio Review meeting in Abuja, where project managers have been summoned to render progress reports of their respective programmes.


Aganga said the funding breakdown showed that the World Bank granted $3.56 billion for 24 projects during the period, with $564.17 million for 13 projects coming from the African Development Bank (AfDB).According to him, the International Fund for Agricultural Development (IFAD) has so far put down $72.1 million for three projects, while the Islamic Development Bank has funded one project to the tune of $30.0 million.


Aganga, who acknowledged that state governments’ inability to meet their counterpart fund commitments has remained one of the major project implementation challenges, said the Finance Ministry would engage donors to ensure that all social sector projects enjoy 100 per cent donor funding.He said beside aiming to check funding hitches and slow pace in the implementation of donor-assisted projects nationwide, the arrangement would make for enhanced financial support, especially in infrastructural projects critical for employment generation, productivity enhancement and poverty alleviation.


The minister said government has evolved measures towards proper utilisation of donors’ funds, such as setting up the Project Financial Management Unit (PFMU) at the Federal level to streamline project implementation standards and ensure compliance with fiduciary and procurement covenants.“The implementation modalities of the PFMU are presently being worked out by Office of the Accountant General of the Federation (OAGF) in conjunction with the International Economic Relations Department, Federal Ministry of Finance,” Aganga said, adding that following Ministries, Departments and Agencies (MDAs) criticisms, the PFMU’s operations were being fine-tuned for hitch-free policy implementation and faster pace of projects’ execution.


He stated that other measures aimed at effective projects’ implementation were approval of a revised external borrowing guidelines meant to ensure that “external borrowings by both states and Federal Government entities for projects and programmes are not only in conformity with national priorities but that they deliver economic and social returns.”He stressed that “the new policy also makes it mandatory that henceforth, only projects and programmes that are approved by the states’ houses of assembly would be admitted into the yearly external borrowing programmes for consideration by National Assembly as an integral part of the yearly budget”.


Also speaking at the event, World Bank Country Representative, Onno Ruhl said the bank has introduced pre-and post-mortem briefing to highlight their projects in Nigeria, beside the electronic payment, which was introduced by the bank to ensure transparency.He said that the electronic disbursement system with Nigeria as the first country to enjoy the facility in Africa would effectively address administrative bottlenecks in the handling of funds, adding that the World Bank was determined to assist Nigeria achieve its Vision 2020 ambition of ranking among the 20 best global economies.


Noting that Nigeria must adequately position itself and be in a hurry to succeed and win on all fronts, Ruhl said all stakeholders must collaborate to ensure there was no compromise on accountability and transparency in contracts managements, projects conception and implementation.Country Representative of AfDB, Mr. Harvey Assah, said since its establishment in 1971, the bank has financed about 65 projects at a total cost of $3 billion, noting that Nigeria has the benefits of concessional loans and concessional market loans within the AfDB window.


He said the bank’s capital outlay for these funding arrangements would enjoy about 200 per cent increase soon, thereby making more funds available in the windows for Nigeria and other countries to access for development purposes.Assah stated that AfDB’s loan profile has mainly been used by the private sector, adding that with $1.5 billion portfolio in Nigeria, about half of the amount has been allocated to the public sector.


Hinting that the amount would witness an increase of about two and half times, he said in the public sector, AfDB was financing about 300 projects, especially on Independent Power Project (IPP) to the tune of $150 million; water project in Ibadan and Jalingo for $250 million and 400 feeders roads in Cross River State, among others.






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