ABUJA (Sundiata Post) – The Federal Executive Council (FEC) meeting, presided over by Vice-President Namadi Sambo, on Wednesday guaranteed foreign loans totalling over $400 million for Lagos, Rivers, Osun and Ogun states towards implementing infrastructure projects in the states.
It said the loans that are all going to states controlled by the opposition All Progressives Congress (APC) on the eve of the general elections, should not at all be seen as Greek gifts meant to sway votes.
Minister of State for Finance, Bashir Yuguda, who briefed alongside Ministers of Aviation, Osita Chidoka; Water Resources, Sarah Ochekpe and Education, Ibrahim Shakarau, said President Goodluck Jonathan would not diminish his office with tribal or political sentiments, and that he remained desirous of bringing development to all parts of Nigeria no matter who resides there or which political party runs the state.
Yuguda said the President has therefore not barred any minister from facilitating or assisting any state government in the processing of any development loans, which is why the latest credit facilities to these states were brought to FEC for deliberations and approval.
His words: “Like we have been saying over and over again and like Mr. President is saying over and over again he is the President of all Nigerians. There is a distinction between governance and politics and Mr. President does not bring issues where they are not supposed to be situated.
If that is the President that Nigeria has today we would not have brought these issues to council. We can step it down. We can create issues but that is not what we are saying.
The facility is meant to improve living conditions of the most vulnerable urban population of metropolitan Lagos, improve management and treatment of solid waste, strengthen the capacity of Lagos State and implement urban development projects in Lagos State.
The payment period for the loan is 20 years, including seven years moratorium, commitment fee of 0.25 per cent per annum and an appraisal fee of 0.25 per cent.
The project has three major components: slum upgrading in the two Local Council Development Authorities (LCDAS) of Ifelodun and Bariga by the Lagos State Urban Renewal Authority (LASURA); construction of solid waste management facilities in Lagos State by Lagos State Waste Management Authority (LAWMA) and providing capacity building and technical assistance for LASURA, LAWMA, Project Management Unit and the two LCDAs.
Council also ractified President’s anticipatory approval of African Development Bank (AfDB) credit facility in the sum of $200 million for the proposed Port Harcourt water supply and sanitation project and an African Development Fund ( ADF) credit of $5 million to support Urban Water Sector Reform Project.
The project has five major components including water supply and sanitation infrastructure in Port Harcourt, Institutional support to Port Harcourt water corporation, hygiene, sanitation and environment in Port Harcourt, Urban Water Reform at the Federal Level and project management.
The credit facility will be secured from ADB with a repayment period of 15 years, 5 years moratorium, the interest is enhanced variable spread loan with lending spread of 0.60 per cent per annum which translate to 1.56 per cent
For the ADF, the Principal shall be repaid over a period of 22 years, with eight years grace period, interest rate of1 per cent per annum
The project is captured in the approved 2012-2014 External Borrowing Plan of Federal Government
Council also gave approval for a multi-donor credits from the international bank for reconstruction and development of World Bank, Africa Development Bank, Germany and French Development Agency in the sums of $500 million, $450 million, $200 million and $130 million.
Council further ratified the President’s anticipatory approval to obtain $70 million credit facility from the International Development Association for the proposed Africa Higher education Center of Excellence project.
The proposed project is meant to build on the efforts made under the previous World Bank assisted science and technology education in post- Basic projects.
The main project development objective is to support the recipient countries to promote regional specialization among participating universities in areas that address regional challenges and strengthen the capacities of these universities to deliver quality training and applied research.
The objectives of the project are to increase the coverage, continuity and quality of service in the state capital, increase the financial viability of existing water utility through increase in revenue collection, providing financing to rehabilitate and build infrastructure needed to increase access to water supply services in the state capital and improve the governance of water sector in the state.
The facility will be secured from the FDA on blend terms with an interest rate of six months libor plus margin, a repayment period of 20 years, including seven years moratorium, commitment fee of 0.25 per cent per annum and an appraisal fee of 0.25 per cent.
The credit would be on-lend to Ogun State on the same terms and conditions offered by the FDA to the Federal Government.
The Council approved the anticipatory approval of an Islamic Development Bank Loan of $65 Million for financing the water supply and sanitation project in Osun state.
The loan is to be financed under the manufacturing financing (IStisna’a).
The overall approval of the project is to amongst other things provide safe water, reduce waterborne diseases, improve agricultural output and tackle sanitation and environmental challenges.
The terms and conditions of the loan as negotiated and agreed between the ID. And the Nigerian officials comprising ministry of finance and Osun State Government in October 2014 and consequently approved by the IDB Board of Directors are as follow:
Manufacturing financing (IStisna’a):
Amount $65 million, repayment period 15 years, gestation period 4 years and markup Libor + 155bps which currently translates to 1.5% per annum
The Project was approved in the 2012-2014 external borrowing plan of the federal government.
Council also approved the President’s anticipatory approval to obtain additional financing of $140million credit from the international Development Association in support of the community and social development project being implemented in the 36 states of the federation and the FCT.
The overall project development objective of the proposed additional credit is to increase access to improved social and natural resource infrastructure services in a sustainable manner throughout the country.
Council also ratified the President’s anticipatory approval to obtain $70 million credit facility, associated grants of $15 million and $0.48 million in support of the climate change adaptation and agribusiness support programme from International Fund for Agricultural Development
The objective of the programme is to increase incomes, enhanced food security and reduce poverty and vulnerability for small holder farmers, particularly women and youth, as well as create jobs and accelerate economic growth on a sustainable basis.
The project has four major components namely: Productivity Enhancement and Climate Resilience, Enterprise Development for Women and Youth, Institutional Development, Programme Coordinating and Management.
Nigeria has over 32 million Haarable land with only 46 per cent under cultivation. About 80% of the populace derive their livelihood from agriculture and other related activities.
The Federal Government’s agricultural Transformation Agenda is aimed at reducing poverty, creating employment, improving prosperity and living standards for all Nigerians.
The project is to be implemented in Borno, Jigawa, Katsina, Kebbi, Sokoto, Yobe and Zamfara states for six years. The main beneficiaries are 727,000 persons in production states and entrepreneurial groups. IG is also expected to have short and long term effect on local employment within local communities.
Consequently, skilled and semi skilled workers (including women and youth) will be required to work on the construction and rehabilitation of infrastructure in short term, while in the long term, the expansion in production and processing activities would bring about a more sustainable and Niger demand for labour, especially of women and youths involved in processing activities.
The facility will be secured at a highly concessional rate from IFAD with repayment period of 40 years, including 10 years moratorium, and a service
charge of 0.75 percent per annum, a commitment charge of 0.5 precent per annum, payable on the amount withdrawn.