Nigeria borrowed $3.1billion between 1999 and 2007 from multilateral agencies like the World Bank, African Development Bank and other international lenders, the Debt Management Office (DMO) said in Abuja yesterday.
Out of this amount, $2.9billion was collected from multilateral agencies while the remaining $200million was gotten from other sources not mentioned.
Director General of the DMO, Dr. Mansur Mukhtar made this known during an interactive session with editors in Abuja yesterday where he also said about $139million was paid as commission to the CBN and fees to consultants who rendered various services ranging from financial to legal.
He said most of the multilateral loans had very low interest rates with longer periods of payment, pointing out that some of the loan facilities have however been negotiated even before the coming of the current government.
“Borrowing by this administration since 1999 amounts to an estimated $3.1billion of which $2.9billion are from multilateral resources. China loan facility of $2.5billion was also secured.”
“However, some of the loans were negotiated prior to this administration given the extaneded loan preparation cycle. Also, a lot of money has not been disbursed yet. For instance, China loan is a facility so no contract agreements have been signed for individual projects.”
“The multilateral loans are highly concessional e.g. the International Development Association (IDA) loans are interest free with service charge of just 0.75percent and commitment charge of 0.5percent and up to 10year moratorium and 35-40year repayment period. These are loans geared to social sector, infrastructure, community development and poverty reduction.”
“The China loan facility carries 3 percent interest, 5 year grace period and upto 15 year maturity.”
Dr. Mukhtar said the nation had to borrow to finance key infrastructure projects, stressing that: “There is nothing wrong with borrowing per se the major considerations are terms and conditions of the loans, size of the debt in relation to absorptive and servicing capacity, overall fiscal situation and resource financing gap. Other factors are debt sustain-ability issues, oversight and monitoring arrangements.”
During the same occasion, Dr. Mukhtar also said that about $139.27million was paid as commission to the CBN and fees to the various consultants who rendered legal, financial and other services to the country during the Paris and London Club debt exit transactions.
A breakdown of payments made during the transactions shows that $12.09billon was paid to the Paris Club of creditors while the Central Bank of Nigeria (CBN) charged $120.94million as commission charges. The apex bank usually charges commission on its transactions with government and other private sector entities. Financial and legal advisers amongst others got a total of $1.3million
In the London Club deal, $830.96millon was paid to the club for loans held in Par bonds, $476.6 was paid to the creditors as loans held in Prommissory notes and in the two transactions, the CBN charged $14.87million while $1.82million was paid to financial and legal advisers, intermediates, trustees and other parties involved in the deal.
The country also paid $81.67million to the London Club as loans owed through associated oil warrants. $340,000 was the total cost of fees paid to advisers, trustees and other intermediaries in the deal.
About $15billion in total was paid in the last two years to the two clubs of creditor nations to free Nigeria from the debts it owed for decades. This includes the percentages that were paid as commission to CBN and fees paid to advisers.
President Olusegun Obasanjo last month approved that all payments made to exit the Paris Club and London Club debts be audited to ensure that the transactions were done transparently and the processes conform to international best practices.
Price Water House Coopers (PWC), a renowned international auditing firm, was engaged to do the job and its report is expected to be out by next week.