The FG approves plans forexternal loans and borrowing from the World Bank

The Federal Government has approved plans for
external loans from the World Bank, President Muhammadu Buhari has endorsed the
Minister of Finance, Mrs. Kemi Adeosun’s plan to
seek external loans at an interest rate of 1.25
per cent.
Adeosun had earlier revealed plans to take long-
term loans at a very low interest rate from

the
African Development Bank (AfDB), World Bank,
China Exim Bank and other specific financial
institutions across the world.
“We have a very conservative borrowing
programme, and we must borrow to construct
rail – the rail we have now was done in the
colonial era – and there has been really
significant upgrade. We will borrow sustainably
and conservatively to make sure we don’t burden
future generation,” she said.
She explained that her borrowing plan is clearly
different from what obtained in the past where
Nigeria borrowed to pay salaries, stating that the
government would be borrowing to invest in
infrastructure and generate additional revenue.
In a series of tweets on Thursday, Buhari’s office
said the borrowing plan was awaiting the
approval of the National Assembly.
Aside the concessional loans, the Federal
Government said it would tap into the Eurobond
market in “due course”, to seek funding for
healthcare, mining, power and agriculture.
The 2016 budget, with an expansionary outlook,
has a deficit in excess of N3 trillion, which the
Federal Government intends to use to stem both
internal and external borrowing.
With Nigeria in recession, the Ministry of Finance
and the Presidency are working hand-in-hand to
revamp the economy in the shortest possible
time.

Recall that recently the government awarded the
China Civil Engineering Construction Corporation
(CCECC) a $1.68 billion contract to upgrade and
modernise the Kano-Kaduna segment of the
Lagos-Kano rail line.
In context, the rail line would move as fast as
travelling from Lagos to Ibadan in 48 minutes
and is expected to be faster than the Kaduna-
Abuja rail line.
CCECC also signed a contract worth $3.4 billion
for the construction of the Calabar-Port Harcourt
Segment 1, which aims to extend the rail line
between Calabar and Port Harcourt to Onne
Deep Seaport.
The Abuja-Kaduna rail line was delivered on July
13, 2016, while the Lagos-Ibadan segment
remain uncompleted.
Rotimi Amaechi, Minister for Transportation, said
the newly signed projects would be concluded in
two years. On Friday, CCECC said the project
would be concluded in 36 months (three years),
contradicting Amaechi’s position.
The same Chinese firm also announced it won
the $1.851 billion Kano city light rail project.

The Federal Government said that details of a
proposed Eurobond due later this year would be
announced “in due course.”
According to the Presidency, the government is
now waiting for lawmakers to approve the plans.