The recent trip by key members of the federal cabinet to China to re-open discussions with the Asian country’s Exim Bank was not without drama, as it has emerged that the journey was almost marred by a spat between the Minister of Finance, Mrs. Kemi Adeosun, and the Minister of Transportation, Mr. Chibuike Amaechi, in far away Beijing, the Chinese capital.

THISDAY learnt the misunderstanding between the ministers transpired when Adeosun did not hesitate to give Amaechi a piece of her mind for meddling in the travel arrangements of directors from her ministry to Beijing.

Her directors were forced to defer their trip and in the process missed their first meeting with officials of the China Exim Bank.

Sources who opened up to THISDAY on the incident, said Adeosun, who was in transit from Davos to Abuja via London, was called in the British capital and asked to proceed to Beijing to hold discussions with the China Exim Bank on the bilateral loans offered by the Chinese government on a number of infrastructure projects in Nigeria, including the railway and airport rehabilitation projects.

She was said to have obtained a ticket to fly with Emirates Airline to Beijing from London and called her directors with the institutional knowhow on the bilateral loans and outstanding counterpart funding agreed between the China Exim Bank and the Nigerian government to join her in China.

But on the day of the meeting, her directors who were supposed to have arrived the day before were nowhere to be seen because they were prevented from boarding their Emirates Airline flight in Abuja.

Amaechi, a transportation ministry source informed THISDAY, was scheduled to fly with his own team on the same flight from Abuja, but had taken umbrage over a contractor of his ministry who had been smuggled into the government delegation.

The transportation ministry source said: “On getting to the airport, Amaechi was angry that a contractor who had no business being on the trip had been included in the delegation.

“So he ordered his directors, those of the finance ministry and the contractor not to proceed on the trip. In the process, all of them including Amaechi missed their flight and had to buy tickets to depart Abuja in the evening on Lufthansa Airways.

“And since Lufthansa flies through Frankfurt, they missed the first meeting in the morning with the China Exim Bank.”

The source said Adeosun was not happy about the incident and confronted Amaechi demanding to know why he had to offload her own directors if he had issues with his team.

“She made it abundantly clear that he had no business offloading her directors from the flight since they knew nothing about the travel arrangements of his team.

“She told him that due to his meddling, they had missed their first meeting at the Exim Bank,” he said.

Although the source did not confirm if Amaechi apologised to Adeosun, he said subsequent meetings with the China Exim Bank progressed without incident.

“The finance minister already had briefing notes and proceeded with the first meeting on her own, but other meetings were held with the entire Nigerian delegation in attendance and they were quite positive,” he said.

He revealed that considerable progress was made on discussions on the bilateral loans and expressed confidence that Nigeria would be able to meet its counterpart funding for some of the crucial infrastructure projects.

“The meetings were very positive and we believe the airport rehabilitation and expansion projects should be wrapped up three months from now,” he said.

Meanwhile, the federal government yesterday denied a report by the Financial Times of London that it was seeking to secure emergency loans of $3.5 billion from the World Bank and the African Development Bank (AfDB) to help fund the N2.2 trillion deficit in the 2016 budget.

Reacting to the report, the finance minister said Nigeria had not applied for any emergency loans.

“The truth is that Nigeria, as part of the plan to fund the 2016 budget currently undergoing the approval process of the National Assembly, has indicated its intention to borrow N1.8 trillion principally for investment in capital projects to stimulate the economy,” the minister said in a statement issued by her media aide, Mr. Festus Akanbi.

According to Adeosun, the option of the World Bank was to ensure an optimum financing structure, adding that the 2016 budget was part of the Medium-Term Expenditure Framework (MTEF) of the federal government, which the World Bank is aware of.
The proposed budget deficit, she stressed, would be funded equally through external and domestic borrowing.

Although the federal government has debunked the report to seek emergency loans from the World Bank and AfDB, the government is tinkering with the option of approaching multilateral agencies like the World Bank and AfDB and export credit agencies, including the China Exim Bank for loans, due to their concessionary interest windows.

Providing further insight, Adeosun said the overall objective of the lending programme is to access the lowest possible cost of funds to finance capital projects proposed under the government’s plan to stimulate the economy. Capital projects include power, transport, road, housing, etc.

She explained that options with multilateral agencies, including the World Bank and AfDB were being explored.

Multilateral agencies provide loans under concessionary terms, which include low interest rates, a moratorium before repayment, and long tenors.

The second funding option being explored includes export-credit agencies such as China Exim Bank, the statement added, stressing that these funds are also concessionary and are tied to specific capital projects.

The need to invest in infrastructure to stimulate the economy and the long-term payback period for capital projects, she noted, demands that the lowest cost of funds must be obtained, adding that the balance of foreign borrowing required would be raised in the Eurobond market at commercial rates of interest.

The minister explained that by blending these different sources of funding, the overall cost of funds would be maintained at the lowest possible level.

She further stated: “As far as possible, our foreign borrowing will be tied to specific capital projects. A number of these projects are revenue generating which will be used to fund the loan repayments.”

The strategy of pursuing increased foreign borrowing is designed to ensure that the federal government does not “crowd out” the private sector in the domestic market, she said in the statement.

Thisday……..

This page has been viewed 441 times