The Finance Committee of Parliament has deferred government’s request for approval of a 1 billion dollar loan agreement.

The Finance Ministry is seeking Parliament’s approval for a 750 million dollar loan facility agreement between AfreximBank and a 250 million dollar loan agreement from a syndication of banks to finance Capital and Growth-related expenditures in the 2022 budget.

The loan, according to government, is critical to fixing the economy in the short term before a bailout can be agreed upon with the International Monetary Fund (IMF).

But the Minority members on the Finance Committee have resisted the request because the government has not said what the funds would be used for.

Speaking to the media on the development, on Thursday, the Ranking Member on the Finance Committee, Dr. Cassiel Ato Forson said government should provide the Committee with full documentation on what exactly the money would be used for to enable them make a meaningful decision.

“They have not told us what they want to use the proceeds for so we cannot give you blanket approval for chop chop,” he said.

He also pointed out that the document tabled before the Committee had a fundamental defect.

This, he explained is because “What is in the memorandum to Parliament and what is in the loan agreement has some differences –in one breath, we were called upon to approve a loan of 750 million but what is in the agreement has two legs tranche A and B, one is in euros and one in dollars so that will mean that Parliament will have to amend what was brought to us so we called to question the competence of the people that sent the document to us.”

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He added that “the government’s insatiable appetite for borrowing must stop.”

Dr Forson stated that government does not take instruction from the IMF who are foreign partners, adding that we only take “advice from them which can be accepted or rejected depending on the circumstances of the day.”

“What is in the budget is completely different from what they are asking us to do. The budget is saying that in the course of the year, they will be taking a term loan of $750 million so why do you ask us to approve $1 billion when your own budget says 750,” he asked.

He noted that before considering a loan in excess of $750 million, the government should amend the budget through the mid-year review to reflect the loan requested.