The Federal Government and the 36 states got yesterday the National Economic Council’s (NEC’s) green light to borrow about $9 billion in 2013-2014.
The cash will go into infrastructure development, the Council said.
NEC, which comprises the 36 states’ governors, ministers of National Planning, Finance, Federal Capital Territory (FCT) and Central Bank of Nigeria (CBN) governor, took the decision at its monthly meeting chaired by Vice President Namadi Sambo at the State House, Abuja.
Briefing State House correspondents at the end of the meeting, Anambra State Governor Peter Obi disclosed that the loans would be sourced from various international funding agencies and would be strictly used for developmental projects.
Stressing that the total portfolio cuts across both federal and state governments, he said that about $450 million of the total loan package would be sourced for the eastern states, including Edo and Cross River, to fund erosion projects.
He said: “The Coordinating Minister for the Economy (CME) briefed the Council on the current facilities made available by different international funding organizations, including Islamic Development Bank (IDA), African Development Bank (ADB), French Development Agency as well as Chinese and Indian Exim Banks, totalling about $9 billion for projects development.”
“The facilities, which have up to 10 years moratorium and 40 years repayment periods, are available to both the Federal and state governments to fund high impact projects towards improving infrastructure, agriculture and employment generation.”
Maintaining that the National Assembly has already approved the loan portfolio, he said that states are now expected to “meet the requirements for the loans and to ensure that the facilities are meant to fund meaningful projects in their states”.
Cross Rivers State Governor Liyel Imoke said the Council received the report of the Ad-Hoc Review Committee on the Re-Investment Plan in the power sector, headed by him.
According to him, the committee recommended the need to urgently source for and disburse N3.37 billion to ensure the closing of the huge gap between the required power generation and transmission capacity.
He said: “The Committee highlighted the over $4 billion NIPP investment already made in generation, which has produced additional 4,774MW generation capacity by NDPHC and would have raised the overall generation capacity in Nigeria to 9,582 MW in December 2013 – in line with the nation’s updated generation capacity target of 20,000 by 2020.”
“It further noted that investing in the needed transmission infrastructure would ensure, among other benefits, the needed return on investment, the maximization of proceeds from the sale of the generation assets, improved GDP growth rate as well as ensure effective distribution of generated power to the ultimate consumers.
“As a means of solving the envisaged significant transmission constraint by the end of this year and bridging the gap for counterpart funding in hydro plants, the report recommended the following:
“utilisation of the proceeds from sale of generation assets for reinvestment in transmission and hydro projects; Disbursement of $1.65 billion to fund critical transmission infrastructure; $1.72 billion to fund hydro generation; the sourcing and immediate release of $3.37 billion to bridge funding, pending the realisation of proceeds from generation asset sale”.
NEC, he said, commended the Committee for the detailed report and recommended the implementation of the recommendations to ensure adequate evacuation of generated power towards meeting effective power demand in the country.
“The Council also recommended that 11 small dams spread across the country should be accommodated in the funding plan because of their potentials towards boosting power, water supply and agriculture in the country”, he stated.
JD:9 BILLION DOLLARS!With the level of corruption in the country and elections approaching,there will be no prizes for those who can guess where these funds might be headed.