The Senate on Thursday approved $1.806billion Federal Government 2016-2018 External Borrowing (Rolling) Plan for the Lagos – Kano railway modernization project and the reconstruction and rehabilitation of the North East.

The railway project, which includes the Lagos-Ibadan segment double track, is to be funded by China Export-Import Bank in the sum of $1.231billion, while the North East rehabilitation is to be funded by the World Bank in the sum of $575million.

The Senate also okayed $750million medium term external loan requests for six states, out of the request of $1.49billion for 10 states.

The states whose loan requests were approved are Abia, Ebonyi, Enugu, Kano, Ondo and Plateau.

The approvals followed the adoption of the report of its Committee on Local and Foreign Debts chaired by Shehu Sani (APC, Kaduna State).

The terms of the China EXIM bank loan include a maturity tenure of 20 years with a moratorium of seven years at interest rate of 2.5 percent. It also includes a management fee of 0.5 percent, a commitment fee of 0.2 percent, and duration of three years.

The committee in its report observed that the railway project would link the North to the South by rail and promote trade, create jobs and also reduce pressure in roads infrastructure.

It stated: “That the Senate do recommend the immediate negotiation for the Eastern corridor (Port Harcourt – Maiduguri) and submit same for approval by the National Assembly”.

The committee also recommended the approval of the remaining segments of the Rail Modernisation Project as soon as they are approved by the Board of China EXIM Bank. The segments are Kano-Kaduna segment, the Lagos – Calabar segment (coastal railway project), and the Port-Harcourt – Maiduguri segment (eastern corridor).

It added that the World Bank funded projects would facilitate the much needed rehabilitation and resettlement of the people of the region back to their respective homelands and allow schools to be re-opened.

The breakdown of the utilisation of the $575million World Bank includes $125million for polio eradication support and routine immunisation project, $75million for community and social development project, and $125million for Nigeria States Health Programme Investment project.

Others are $100million for State Education Programme Investment Project, $100million for Nigeria Youth Employment and Social Support Project and $50million for Fadama III project.

In its report on the loans for the six states, the committee said the loans would facilitate the provision of critical infrastructure and social amenities for the residents and citizens.

It however said there was a need for phased approval of the loan requests for four states, which include Ogun, Jigawa, Kaduna and Katsina.

“That the remaining four state in the borrowing plan be deferred,” the report read.

A breakdown of the approved loans are $70million from African Development Bank (ADB) for Ebonyi Ring Road Project (to be co-financed by Islamic Development Bank), $200million ADB facility for Rural Access and Mobility Project (RAMP) in Abia State, and $200million IDB loan for Kano State Integrated Agricultural and Water Resources Development.

It also approved a $100million request for Enugu and Kano from the French Development Agency for the third National Urban Water Sector Reform (NUWSRP-III).

The Senate directed the relevant committees to ensure effective oversight on the implementation of the projects for which the loans were approved.

 

Source: Businessdayonline.com

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