$30bn loan: Power, transport, Works ministries to takes lion share

By Ihesiulo Grace 9 December 2019 37 No comment

The ministries of Power, Works and Housing and Water Resources will take the largest share if eventually Nigeria secures the $30bn loan it intends to get from different multilateral organisations.

According to a statement by Ajuri Ngelale, President Muhammadu Buhari’s special assistant on Public Affairs, shows that the planned projects spreads across different sectors of the economy,

In the Ministry of Power, the Mambilla Hydropower Project loan is expected to gulp $4.8bn from China Exim Bank with and 20 year maturity repayment as well as 3 per cent interest rate

Also, the Transmission Company of Nigeria Upgrade Programme is expected to gulp $364m and $200m with a 20 year maturity and -2.9 per cent interest rate respectively.

The power transmission projects are expected to cost a total $5.61 billion and will be sourced from the World Bank and the Africa Development Bank.

In the Ministry of Water Resources, the greater Abuja water supply project loan to be sourced from China Exim Bank at 2.5 per cent interest rate is expected to cost $381 million dollars.

Also, the North East/North Central water supply will cost the Federal Government $150 million with a 1.1 per cent interest rate to be sourced from the African Development Bank.

In the Ministry of Agriculture, the agriculture transformation support II is expected to cost $200m with a 20 year maturity and a 1.1 per cent interest rate.

In the same vein, staple crops processing zone development in Kogi and across the 35 states is expected will gulp $600m at 1.1 and 1.25 per cent interest rates respectively to be gotten from the World Bank and the Africa Development Bank.

On social investment, the Federal Government is borrowing a total of $1.1 billion to fund Micro, Small and Medium Enterprises with a maximum of 3 per cent Interests rates spread across a repayment maturity year of 25 years.

The loan is to be gotten from the World Bank, African Development Bank, AFD France and KFW Germany.

The fiscal governance database linking of the Economic and Financial Crimes Commission, the National Identity Management Commission, National Bureau of Statistics and the Office of the Accountant General of the Federation will cost $200 million with a 1.25 interest rate from the World Bank.

While ICT backbone phase III loan from the China Exim Bank will cost $328m at 2.5 percent interest rate across 25 years.

Also e-road asset management is also expected to cost $33.7m across 20 years maturity with a 1.12 per cent repayment.

Furthermore, $150 million was budgeted for the Mining Reform Fund with an interest rate of 1.25%.

Similarly, the Education Sector Reform Programme (Performance for Results Initiative/FGN Education-Cash Interventions to States on a Performance/Value Basis) is estimated to take $500m with a 21 year Maturity and 3 per cent interest.

A further breakdown of the loan spendings shows that Housing Financing Guarantee Project is expected to cost $100m and a 20-year Maturity repayment from the African Development Bank with a 2.9% interest rate.

Transportation ministry which has one of the largest proportion of the loan has a budget of $5.53bn with a maximum of 20 years maturity repayment.

A breakdown of the projects include coastal railway (Calabar – Port Harcourt – Onne Deep Sea Port) costed at $3.47bn, Abuja Mass Rail II (City Centre to Outer Districts) which is to also cost $1.25bn at 2.75 per cent interest rate from China Exim Bank.

In the Ministry of Works, the East-West Road is costed at $800m -at a 20 year Maturity repayment period and 2.75 per cent interest from China Exim Bank.

Also, the Gombe-Biu road, Calabar-Ekang- Ajassor road, Enugu-Abakiliki-Ogoja road, Katsina-Jibiya-Niger road and the Maokwa-Kaduna road construction is expected to gulp $434.7m at 1.1% interest rate from the African Development Bank.

In the Ministry of Information, the Federal Government has budgeted to spend $500m on NTA digitalization project to be sourced from the China Exim Bank at 1.1% interest rate while the West Africa Disease Surveillance System is expected to gulp $90m at a 25-year Maturity repayment and a 1.25% Interest to be sourced from the World Bank.

Furthermore, the World Bank state support will see Kaduna State Development Policy Operation gulp $350m in a 25 year Maturity plan and interest rate of 1.2 per cent.

The statement by Ngalale added that ahead of the inflow $1 trillion Foreign Investment into Africa via Africa Continental Free Trade Area agreement, the Federal Government currently needs the needed infrastructure to compete globally.

He also added that if the loan is secured and the projects are successfully completed, it will lead to millions of job creation.