The Senate has approved the request by President Muhammadu Buhari to borrow the sum of $22.8bn.
This is just as the Senate approved the sum of N346billion as 2019 budget for the Niger Delta Development Commission ( NDDC).
This followed consideration of report of the committee on Niger Delta, presented by the Senate he Chairman, Senator Peter Nwaoboshi.
Buhari had in November 2019,wrote to Senate and requested it to approve the external borrowing plan to tackle infrastructure challenges and fund execution of critical projects.
The approval by the Senate came on Thursday after it considered and passed the report of the committee on local and foreign debts 2016-2018 federal government external borrowing plan.
The report was presented by the committee chairman, Senator Clifford Odia.
Apart from majorly addressing the nation’s challenges of infrastructure, Buhari had said the loan would be utilised for execution projects including the Mambila Hydro Electric Power Project, Railway Modernization Coastal Railway Project (Calabar-Port Harcourt-Onne Deep Sea Port Segment), Abuja Mass Rail Transit Project (Phase 2), Lagos Kano Railway Modernization Project (Lagos-Ibadan Segment Double Track), Lagos Kano Railway Modernization Project (Kano-Kaduna Segment Double Track), among others.
Also, part of the loan is to cater for FCT and three states of Kaduna, Katsina, Kogi to the total sum of $1.030 billion for execution of varied projects.
While the FCT is allocated the sum of $470 million, Kaduna has $350 million loan, Katsina – $110 million while Kogi will benefit $100 million respectively.
It will be recalled that the FCT minister, Mohammed Bello, during his presentation before the committee had said the loan if approved, would be used to provide adequate water and ensure completion of railways in the territory.
Also, the chief of staff to Kaduna state governor, Muhammed Abdullahi had explained that the state intend to utilise the loan for execution of capital projects such as education, healthcare, roads and security.
Similarly, Yakubu Nuhu, commissioner for finance in Katsina state, during his presentation had explained that out of the $110 million loan, $100 million is grant from Islamic Development Bank and that the loan is interest free. He stated that the money will be used to address the menace of child and maternal mortality faced by the state.
Ashiru Idris,Kogi state commissoner for finance, budget and economic planning had stated that the $100 million loan would be used to ensure development of infrastructure.
Meanwhile, the minister of finance, Zainab Ahmed, had explained that the terms and conditions of the proposed loan has the following: “one, this loan is concessionary and semi concessionary loan with interest rate of 25% per anum and it is a long term loan with repayment rate of 15 to 30 years.
“The loan is going to enhance the productivity of economy, to improve electricity, create jobs and reduce poverty. It will also enhance agriculture, food security, extension of Nigerian railways and rehabilitation of the North East,” she said.
However, presenting the report before the Senate on Wednesday, Senator Odia said the committee found with utmost importance, the genuiness and very serious concerns of Nigerians about the level and sustainability/serviceability of the borrowing.
The report however stated that “out of the total borrowing request of $22.898billion contained in the reforwarded request of Mr. President, the Sum of $17.065 is for funds proposed to be borrowed from China Exim Bank.”
For works and housing sector, emergency road rehabilitation and maintainenace will gulp $434,700,000; institutional strengthening and implementation of policy reforms is allocated $33,750,000 while the Abidjan – Lagos corridor highway development project study is budgeted $1,500,000 respectively.
The specific roads earnmeark for emergency rehabilitation with tranche of Finance from the World Bank as contained in the report are: Home – Biu road (118km), Calabar – Oban -Ekang – Ajassor road (190km), Katsina – Jibiya- Niger Republic Boarder road (65km), Enugu – Abakiliki – Ogoja junction – Ikom – Mfum road respectively.
Also, for the transport sector, the approved loan will service the Lagos – Kano railway modernisation project (Ibadan – Kano segment double track) with $5,530,000,000 and railway modernisation coastal railway project (Calabar-Pprtharcourt Onne sea port segment) $3,474,000,000.
While the greater Abuja water project is budgeted $381,095,037, the Abuja mass rail project will gulp $1,252,293,005; development of the minning industry project $150,000,000; NTA digitalization project:$500,000,000; East west road:$800,000,000; education sector reform programme renamed better education service delivery for all (BESDA): $500,000,000.
Other components the loan is intended to finance are: National information and communication technology infrastructural backbone by galaxy backbone (phaseII)$328,108,731; agriculture transformation project (ATASP) $200,000,000; staple crops processing zone $500,000,000 respectively.
The Senate has recommended sources of the loan, as contained in the report as follows: World Bank:$2,854,000,000; African Development Bank: $1,888,950,000; Islamic Development Bank:$110,000,000; JICA:$200,000,000; German Development Bank: $200,000,000;
China Eximbank: $17,065,496,773; and AFDB: $480,000,000 respectively.
Senate President, Ahmad Lawan while playing the approval urged the federal government “use the loan judiciously and for the purpose it is meant. “
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