Vice President Namadi Sambo’s Islamic Development Bank loan

EARLY this week, reports emerged that Vice President Namadi Sambo, on behalf of the Federal Government, had “sought the support of the Islamic Development Bank (IDB) for the provision of about $450M to expand the power transmission system to wheel up to 20, 000 megawatts of electricity”.

Namadi Sambo made the demand during a courtesy visit by the IDB President, Dr. Ahmed Ali, in Saudi Arabia, where the vice president is performing Umrah, the lesser hajj. Dr. Ali who received a list of other requests from the vice president, revealed that the bank had approved three of five projects that Nigeria submitted.

These are the construction of four new science secondary schools in Kaduna state worth $17.9M; construction of a 300-bed specialist hospital in Kaduna state at $43.15M; and the Zaria water supply project worth $81.0M. All are in Sambo’s home state.

It is interesting that monies are being sourced for projects, ostensibly to improve the quality of lives of Nigerians.  We have the negative experience in the recent past of foreign loans that were badly applied for which our country suffered dire consequences. Kaduna is my second home, so I follow its development issues very keenly.

The numbers crunching around the IDB loan reveals that the devil is always in the detail, with these foreign loans and what they are meant to finance. A good friend pointed this out to me during the week and I will like to share it. The IDB loan will construct four new science secondary schools at $17.9M. At today’s official CBN rate of N155.25 to the USD, that translates to about N2.778B.

Divided by four, the number of schools to be built, each school will cost about N694, 743. 750M. The professionals in the construction industry need to explain and justify these costs; but more poignantly, from the cost element, how many graduate teachers in Mathematics, Physics, Chemistry and Biology are there to employ in Kaduna state for these schools? And is thought given to that vital component of the project?

These schools are to be located around the state, but how will laboratories run where there is no regular electricity supply? If they use generators how do they guarantee regular supply of diesel and what is the cost component for diesel supply?

The second interrogation relates to the construction of a 300-bed specialist hospital at $43.15M; which is N6.7B. In Kaduna State, ABU Teaching Hospital is already located in Shika, in Namadi Sambo’s hometown of Zaria. The Barau Dikko Specialist Hospital is being upgraded into a teaching hospital for the Kaduna State University. With two teaching hospitals in the state, what’s the reason for a third specialist hospital? Besides, there is also the 200-bed 44 Military Reference Hospital in Kaduna.

It was upgraded to UN standard by General Abdulrahman Danbazau, former Chief of Army Staff. In addition to provision of health services to members of our armed forces, the hospital is open to civilians. There is even provision for a Presidential Wing, rather like a hospital within a hospital. All radiological equipment came from GE; it had over 20 consultants covering most areas of medicine.

If Namadi Sambo’s specialist hospital comes on board, how functional will it become, with the epileptic power supply. And are we not better off investing in preventive, primary health care than the prestigious, money-consuming curative levels?

The third item is the Zaria water supply project at $81M or N17.9B. The project has gone on for a very long time and it is interesting that people allege that the vice president’s company is the contractor for the water project! The money is actually the capital component of the project, without much thought going into the recurrent cost that will be incurred, long after the capital spending has been done.

Let me point out as a matter of interest, that according to the Debt Management Office (DMO), Kaduna is only second to Lagos in the level of foreign indebtedness at $215. 68M, as at 2012. We must now add to that, Namadi Sambo’s new IDB debt of $142. 050M.

Those who know how these things work, say there are dangers ahead: the international price of oil can drop; the theft of oil in the Niger Delta may assume a worse dimension, especially with Petroleum Minister, Diezani Allison-Madueke saying not much can be done to find restitution for twenty years; Nigeria’s dollar revenue can drop, while the CBN might be unable to support the naira, with serious consequences for dollar denominated loans, such as Namadi Sambo’s IDB loan.

Then there is the huge domestic debt profile too. How will Kaduna state cope? Namadi Sambo will be long gone from the scene but the consequences will be there into the future. We must give ourselves the pause about these foreign loans and projects they are incurred for.

In truth, these problems are nationwide. In my other home, Kwara state, in the eight years of Bukola Saraki, billions of naira went into appropriations for the Ilorin water supply project and till today, the jury is out about how much water has come out of our taps! We in dire straits indeed!