The Federal Government has given details of its plans to take a $29.960 billion foreign loans designed to address infrastructure deficit in the country.
Festus Akanbi, Special Assistant on Media to the Minister of Finance, Kemi Adeosun, said in a statement issued in Abuja that the borrowing is a three-year-plan covering proposed projects for 2016 – 2018. As such, the borrowings will be phased over the three year-period.
The Finance Ministry further explained that the 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.
It also explained that the planned Eurobond issuance in the international capital markets is the only commercial source of funding.
President Muhammadu Buhari had earlier sought the approval of the House of Representatives to take the foreign loan. In a letter he addressed to the Speaker of the House, Yakubu Dogara, President Buhari explained that the projects cut across agriculture, health, education, and water supply.
“Considering the huge infrastructural 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 our annual budget to bridge the infrastructure deficit, it has become necessary to resort to prudent external borrowing to bridge the financial gap which will largely be applied to key infrastructure projects namely power, railway and road project amongst others,” he explained.
Buhari also said the $29.96 billion is made up of proposed projects and programs loans of $11.274 billion, special national infrastructure projects of $10.686 billion, Eurobonds of $4.5 billion and Federal Government budget support of $3.5 billion.