Despite concerns by some analysts and the International Monetary Fund (IMF) about Nigeria’s rising debt stock, the Federal Executive Council (FEC) has approved another $247.3 million foreign loan for infrastructure development.
Nigeria’s domestic and foreign debt had jumped from N12.12 trillion in 2015 to N24.38 trillion in 2018.
Giving a breakdown of the loan based on sources, the Minister or Finance, Zainab Ahmed, said that out of the $247.3 million loan, $150 million would be sourced from African Development Bank (AfDB) for rural electrification projects while $50 million would also be borrowed from Africa Grow Together Fund for rural electrification projects nationwide.
In addition, the minister hinted that the French Development Agency would give $20 million for onward lending to Lagos State for strategic urban roads rehabilitation.
Ahmad explained that the approval by FEC for the loans was sequel to the approval of three memos submitted by her ministry in respect of the loans.
According to her, the first approval of $150 million loan from the AfDB and $50 million loan from African Grow Together Fund for electrification project were very important to ongoing efforts to sustain economic growth.
She explained: “The project is a nationwide initiative to be implemented by the rural electrification agency. The project aligns with the strategy of federal government on electrifying rural community. The project has four components, first is solar hybrid mini-grid for rural economic development, the second is productive appliances equipment for up-grid communities and the third is energising education while the fourth component is institutional capacity building.
“The impact of the project when fully implemented, about 500,000 people will be able to have access to electricity for about 105,000 households. The maximum power that will be generated will be 76.5 megawatts installed generating capacity part of which is 68,000 megawatts of solar.
“Eight universities will benefit from this scheme and about 20,000 small, micro, medium enterprises across different communities in the nation.
“The second approval the north Core dorsal regional transmission project. This is a project that is part of the pipeline for the pipeline for the west Africa power pull priority projects. The intention is for the creation of regional power pull in the region of west Africa. The post project aims to connect Nigeria, Niger, Benin Republic, Togo, Burkina Faso with a high voltage 330 kilowatts transmission line, to facilitate energy trade amongst participants.
“The project is in the total sum of $640 million out of which each of the four countries involved has a component. Nigeria has the smallest component in this pact which is a total loan of $27.3 million IADE facility, it is a concessionary loan. This is a loan that the four countries are taking together, the other three countries have concluded theirs, so this is one of the final stages for Nigeria to conclude its process”, Ahmad added.
Expatiating further, the minister said that the $20 million loan from France would be obtained for onward lending to Lagos State Government to rehabilitate and open up strategic urban roads in the state, including Marina interchange, with great potential for direct benefit to about 1.8 million road users.
Ahmad clarifies further: “The third loan approval is $20 million, for the Lagos State Strategic Transport Master Plan, this facility is from the French Development Agency. The objective of the project is to improve the living conditions of the inhabitants of Lagos urban area and to promote urban development sitting by efficient and effective transport system.
“The project has two major components, first is to rehabilitate urban roads and the creation of minimum of eight equality bus corridors and the creation of two multi-model inter-changes at Marina and Mile 2. The second objective is to provide technical support for implementation and management.
“When completed, the project is expected to impact 1.8 million inhabitants of Lagos State and accumulative 1.5 million users per day for inter-model inter-changes without about 620,000 boarding at Mile 2 and 480,000 boarding at Marina. Another estimated 630,000 boarding at TBS”, the minister added.