Nigeria approves $9billion jumbo loans for states, FG

The National Economic Council (NEC) on Thursday approved borrowing plans for the Federal and State Governments to enable them access the $9 billion soft loans offered by International funding organisations. The International Funding Organizations include Islamic Development Bank( IDA), African Development Bank (ADB), French Development Agency as well as Chinese and Indian Exim Banks.
The Minister of National Planning, Dr Shamsudeen Usman, said this while briefing the State House correspondents on the outcome of the monthly NEC meeting, presided over by Vice President Namadi Sambo.
According to him, the facilities, which have up to 10 years moratorium and 40 years repayment periods, are available to both the Federal and State Governments to fund high impact projects to improve infrastructure, agriculture and employment generation.
“The utilisation is going to be for infrastructure, water, housing, health, education, agriculture and so on and so forth.
“It is essentially for infrastructure purposes, it is not going to be borrowed like we have done in the past, to borrow money and use it for recurrent consumption. It is going to be investment in capital, and is covering most of the states.”
Usman said that $300 million of the amount would be invested in the nation’s housing sector to facilitate the construction of more houses for low income earners across the country.
He urged the states to endeavour to meet the requirements for the loans and to ensure that the facilities were meant to fund meaningful projects.
Also speaking to the correspondents on the outcome of the meeting, Gov. Liyel Imoke of Cross River, said he presented the report of the NEC Ad-Hoc Review Committee on the Re-Investment Plan in the Power Sector.
Imoke, who was also the Chairman of the committee, said the committee made a case for more funding to close the huge gap between the required power generation and transmission capacity.
He said the Committee highlighted the over $4 billion NIPP investment already made in generation, which produced additional 4,774MW generation capacity by NDPHC.
Imoke said the additional megawatts would have raised the overall generation capacity in Nigeria to 9,582 MW by December 2013 in line with the nation’s updated generation capacity target of 20,000 by 2020.
As a means of solving the envisaged significant transmission constraint by the end of this year and bridging the gap for counterpart funding in hydro plants, Imoke said the committee recommended the utilisation of the proceeds from sale of generation assets for reinvestment in transmission and hydro projects.
The governor said the committee also recommended the disbursement of $1.65 billion to fund critical transmission infrastructure and $1.72 billion to fund hydro generation.
Imoke said the committee further recommended the sourcing and immediate release of USD 3.37 billion bridge funding, pending the realisation of proceeds from generation asset sale.