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DMO says MDAs borrowed N178.56bn for infrastructure

Federal ministries, departments and agencies (MDAs) are indebted to the Federal Government to the tune of N178.56 billion.

The Debt Management Office (DMO) disclosed this in a report entitled: ‘Federal Government On-lent Loans to MDAs’, stressing that 11 MDAs benefitted from the money lent to them for infrastructure development projects.

According to the agency, each of the MDAs signed a Memorandum of Understanding (MoU) with the DMO to ensure that the debts were repaid.

According to the report, “The Federal Government of Nigeria, in its drive to catalyse the growth of the real sector of the economy for job creation and poverty reduction had, through the Debt Management Office, from time to time, provided loans to the various MDAs to finance specific projects and fulfil some specific policy objectives.

“To ensure that the loans were repaid by the borrowers, each of the on-lent loans to the MDAs was backed by a Memorandum of Understanding executed between the DMO and the respective MDAs.

“These loans were utilised in the development of projects namely: road and railway projects, agriculture, transport, education, cotton, garment and textile, as well as other projects in key sectors of the economy.

“Total outstanding on-lent loans to the various MDAs to support development projects across the different sectors of the economy amounted to N178.56bn as of the end of December 2015.”

The report further reveals that some of the projects on which the funds were expended include N12.5 billion for railway revitalisation (purchase of 25 Locomotives); N35 billion to the Ministry of Defence for peace keeping operations; N4.5 billon for upgrading of broadcast equipment of the Nigerian Television Authority; and N6.3 billion to the Ministry of Finance for the pioneer consumer car finance scheme for public servants.

The report also indicated that five agencies benefitted from the proceeds of the $1bn, which the Federal Government had raised through the issuance of Eurobonds.

“As of the end of December 2015, the beneficiary MDAs of the $1bn Eurobond proceeds were the Transmission Company of Nigeria, Nigerian Bulk Electricity Trading Plc, Federal Ministry of Aviation, Federal Ministry of Power and the Nigerian Sovereign Investment Authority, which is managing a portion of the fund, for investment in gas-to-power projects.” It stated.

It said that DMO, together with the Budget Office of the Federation, Office of the Accountant-General of the Federation and the Fund Manager, established a structure for the management of the Sinking Fund Account for the redemption of the local bonds.

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