FUNSHO AROGUNDADE
Kemi Adeosun, Nigeria’s Finance Minister
Federal Government has released the details of the fresh $29.960 billion foreign loans it plan to borrow, saying it was designed to address infrastructure deficit in the country.
In a statement released Thursday by the Ministry of Finance detailing the borrowing plans, the federal government noted that the external borrowing plan is a 3-year plan covering proposed projects for 2016 – 2018 and as such, the borrowings will be phased over the three year-period.
President Muhammadu Buhari on Tuesday had written to the National Assembly seeking authorisation to borrow $29.960 billion and virement of N180 billion to be appropriated for special intervention to funding of ‘critical recurrent and capital items’.
But the main opposition Peoples Democratic Party, PDP has opposed plans by the Federal Government to borrow the $29.960 billion.
The party, in a statement issued same Tuesday by National Publicity Secretary, Prince Dayo Adeyeye. said FG should first of all, explain to Nigerians what it has done with funds purportedly recovered from allegedly corrupt past government officials.
However, the statement, on behalf of Mrs. Kemi Adeosun, Minister of Finance by her Media aide, Festus Akanbi, explained that “the proposed borrowings are highly concessional (non-commercial), with low interest rates and long tenors.
“The funding is being sought from multilateral institutions including the World Bank, Africa Development Bank (AfDB), Islamic Development Bank (IDB), Japan International Co-operation Agency (JICA) and China EximBank.
“The planned Eurobond issuance in the international capital markets is the only commercial source of funding.
The minister’s aide gives a breakdown of the key infrastructure that the new borrowings will address including: Mambila Hydro Electric Power Project ($4.8 billion); Railway Modernization Coastal Railway Project (Calabar-Port Harcourt-Onne Deep Sea Port Segment) ($3.5 billion); Abuja Mass Rail Transit Project (Phase 2) ($1.6 billion); Lagos-Kano Railway Modernization Project (Lagos-Ibadan Segment Double Track) ($1.3 billion); Lagos Kano Railway Modernization Project (Kano-Kaduna Segment Double Track) ($1.1 billion) and others ($6.0 billion). The totalling $18.3 billion.
The rest of the borrowings are as following; Eurobond $4.5 billion; Federal Government Budget Support $3.5 billion; Social (Education & Health) $2.2 billion; Agriculture $1.2 billion and Economic Management & Statistics $0.2 billion. TOTAL $29.9 billion.
Considering the huge infrastructure deficit currently being experienced in the country and the enormous financial resources required to fill the gap in the face of dwindling resources and the inability of the annual budgetary provisions to bridge the infrastructure deficit, the Nigerian government has considered it necessary to resort to external borrowing to bridge the financing gap.
