The Federal House of Representatives on Wednesday directed its joint Committee on Petroleum (Downstream), Petroleum (Upstream), Justice and Loans and Debts to investigate the $1.5bn loan obtained by the management of Nigerian National Petroleum Corporation (NNPC). The deal struck at the end of last year is seen as crucial to easing the burden on big commodity traders, who were facing the prospect of painful multimillion dollar write-offs. The loan, provided by several Nigerian and international banks and brokered by Standard Chartered Bank Plc, will be paid back over five-and-a-half years while the corporation also put up 15,000 barrels per day of its oil production as collateral. According to Nnanna Raphael Igbokwe, sponsor of the motion, the loan was neither included in the 2013-2015 Medium Term Expenditure Framework nor the 2013 budget. Igbokwe argued that the decision of the NNPC to use the nation’s crude oil, which is the collective wealth of Nigerians as collateral for the loan, “will plunge the nation into greater indebtedness,” adding that Section 44 (2a) of the Fiscal Responsibility Act prescribed a mandatory condition for borrowing by the Federal Government and its agencies. “The Act also stipulates that government corporations and agencies should prepare and submit to the minister, their schedule of estimates of income and expenditure for the next three years,” he added.
