Adedapo Adesanya
By Adedapo Adesanya
The issuance of a €500 million Sovereign Guarantee (about N153.5 billion) from the Credit Suisse AG London Branch as a collateral for a loan has been approved by the Federal Executive Council (FEC) presided by President Muhammadu Buhari on Wednesday.
According to Premium Times, the loan was sourced from a “syndicate of international lenders” to finance the countries industrialization projects.
Minister of State for Budget and National Planning, Mr Clement Agba, explained that the loan was issued to the Bank of Industry (BoI), adding that it would also be used to finance the activities of micro, small and medium enterprises value chains in Nigeria for up to five years.
The minister also revealed that due to the fluctuations associated with the foreign exchange rates, the loan will be swapped to Naira by the Central Bank of Nigeria (CBN) and made available to Nigerian enterprises in local currency.
Mr Agba, while addressing State House correspondents this week, noted that the loan would help support industry, revitalize agro-industrial processing zones, and enable the creation of new jobs.
“We believe about 1.2 million jobs will be created through this facility; increase the income of farming communities and promote the inclusion of SMEs and smallholder producers in the industrial value chain.
“The loan will also help in the deployment of transportation infrastructure to connect farming communities to processors and market,” the Minister said.
He added that the loan is to be disbursed to handlers of major industrialization projects and micro-small and medium enterprises value chains at single-digit rates.
“The guarantor of the loan shall be the Federal Republic of Nigeria, to be executed through the Ministry of Finance Budget and National Planning,” Mr Agba said.
With plans to borrow an additional N1.92 trillion next year, according to the Finance minister (N745 billion from domestic lenders, and about N850 billion from foreign borrowing), Business Post understand that this would thrust Nigeria’s total public debt portfolio to N25.7 trillion.
