Reps Approve $5.8bn Loan Request, $10m Grant from Islamic Bank

By Aduragbemi Omiyale

The $5.8 billion loan request by President Muhammadu Buhari has been approved by the House of Representatives.

At the plenary on Tuesday, the lower chamber of the National Assembly also approved the request to receive a grant of $10 million from the Islamic Development Bank

Business Post reports that the fresh borrowing by the federal government is under the 2018-2020 External Borrowing (Rolling) plan.

The approval followed the submission of a report by the House Committee on Aids, Loans and Debt Management headed by Mr Ahmed Safana Dayyabu:

A breakdown showed that $2.3 billion would be sourced from the World Bank, another $2.3 billion and $10 million from a German consortium, $80 million from Islamic Development Bank, $786.4 million from China Eximbank, $277.0 million from the Bank of China and $50.0 million from the International Fund for Agricultural Development.

According to the federal government, the sum of $2.3 billion from the German firms would be used to the grid modernization and expansion programme under the Presidential Power Initiative (PPI).

The sum of $200 million would be taken from the World Bank for malaria and $90 million, including the $10 million grant from the Islamic Development Bank to tackle the disease in the country.

It was further stated that for the Nigeria Sustainable Water Supply, Sanitation and Hygiene (WASH) project, a loan of $700 million would be taken from the World Bank, while the China Exim Bank will provide $786.4 million for Gurara Phase II.

In addition, the National Agency for Science and Engineering Infrastructure (NASENI) intends to spend $277.0 million for the establishment of three power and renewable energy projects: (a) Solar Cells Production Facility Phase I & II; (b) Electric Power Transformer Production Plant I, II & III; and (c) High Voltage Testing Laboratory, with the Bank of China providing the money through the Chinese African Development (CAP) Fund.

Also, the World Bank will provide $200 million for the Agro-Processing Productivity Enhancement and Livelihood Improvement Support Project, $700 million for the Agro Climatic Resilience in Arid Zone Landscape Project (NEWMAP Successor); $500 million for the Livestock Productivity and Resilience Support Project; while IFAD will make available the sum of $50 million for the Value Chain Development Programme–Additional Financing II.

The green chamber of the parliament expressed optimism that the funds for the completion of these projects would have a positive effect on the domestic economy.