The People’s Alternative Political Movement (TRAP-M) has condemned the move by the Nigeria National Petroleum Corporation (NNPC) to secure a loan of $3.2 billion, so it can acquire 20 per cent of the Dangote Refinery, which is expected to be completed in 2022.
The NNPC had recently announced that it had concluded arrangements to take a loan of $3.2 billion to acquire 20 per cent in the Dangote Refinery, but TRAP-M revealed that “NNPC lacks the power to take a loan from financial institutions to fund the enterprise owned by a private corporate body or individual.”
In a press statement, TRAP-M says, “it has confirmed that the Federal Government approved the Dangote Refinery to be sited in the Free Economic Zone in Lagos, granted duty waivers regarding the imported machinery and special concession to purchase foreign currencies at the official rate. Thus, the contribution of the Federal Government to the Dangote Refinery is more than $4 billion.”
The group says, “from the information at our disposal, the NNPC did not seek the approval of the Federal Executive Council to borrow the said sum of $3.2 billion. Furthermore, under the current political dispensation, the power of the Government at all tiers to borrow is regulated by the Fiscal Responsibility Act, 2007.
“As one of the parastatal under the Ministry of Petroleum Resources, the NNPC is required to comply with the provisions of the Fiscal Responsibility Act pursuant to section 21 thereof. Indeed, for the avoidance of doubt, the NNPC is one of the Corporations, agencies and government-owned companies listed in the Schedule made pursuant to Section 21 of the Act.”
TRAP-M stated that under section 41 (1) (a) of the Act, the power of the Government to borrow is limited to “capital expenditure and human development, provided that, such borrowing shall be on concessional terms with a low-interest rate and with a reasonable long amortization period subject to the approval of the appropriate legislative body where the necessary”.
The Group further stated that “if the NNPC is allowed to take the loan TPAP-M will not hesitate to invoke section 51 of the Fiscal Responsibility Act which states that “A person shall have the legal capacity to enforce the provision of this Act by obtaining prerogative orders or other remedies at the Federal High Court, without having to show any special particular interest.”
Adding that “the planned investment in the Dangote Refinery is blatant of section 16 (2) (c) of the Constitution which provides that “the economic system is not operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or a group.”