FG will issue $ 4.9 billion in new loans for the Kano-Niger Republic railway line, others
A planned standard-gauge railway from the state of Kano in Nigeria to Maradi in the Republic of Niger is one of the projects that the retired Major General Muhammadu Buhari wants to finance with the new external loans that he is applying to the National Assembly. The PUNCH learned his regime.
Buhari had asked the National Assembly to approve new external loans worth $ 4.054 billion and € 710 million ($ 839 million) for his regime.
He also sought legislative approval for grant components of $ 125 million in the 2018-2020 External Rolling Loan Plan.
These were contained in a letter addressed to both chambers of the National Assembly and were read out on Tuesday when the plenary session resumed by Chairmen Ahmad Lawan and Femi Gbajabiamila (Senate President and Speaker of the House of Representatives).
In a letter dated August 24, 2021, Buhari stated that the projects listed in the federal government’s 2018-2021 credit plan were given credit through state loans from the World Bank, the French development agency, the International Fund for Agricultural Development of the EXIM bank. Suisse Group and Standard Chattered / China Export and Credit would be financed for a total of 4,054,476,863 US dollars and 710 million euros (839 million euros) and grant components of 125 million US dollars.
According to the President, the letter included a summary of some key projects in each of the six geopolitical zones funded by the loans and a summary of the expected impact on the socio-economic development of each of the six geopolitical zones.
According to the breakdown obtained exclusively from one of our Department of Finance, Budget and State Planning correspondents, five international agencies will jointly provide the $ 4,054,476,863 component of the loan.
These include the World Bank – $ 3.250 billion; China Exim Bank – $ 225,120,000; IFAD – $ 50,000,000; European ECA / KfW / IPEX / APC -190,255,276 $; Bank of China – $ 276,981,587; and Standard Chartered Bank / China Export and Credit (SINOSURE) -62,120,000 USD.
The euro component of 710 million euros is provided by the AFD – 210,000.00 euros and the Credit Sussie Group 500,000,000 euros, while the World Bank is providing the grant component of 125 million US dollars.
According to the document, the US $ 190,255,276 provided by the European ECA / KfW / IPEX / APC will be spent on the Nigeria-Niger Republic railway line.
The document gave the project title “Kano-Maradi SGR with branch to Dutse” and identified the MDA as the Federal Ministry of Transport.
“Financing costs that the lender has requested to be activated” is written in the column for multilateral institutions.
Regarding the expected impact of the project on geopolitical development, the German government wrote: “The project is intended to connect Nigeria with the Republic of Niger from Kano-Katsina-Daura-Jibiya-Maradi with Zweig to Dutse.
“It is part of the Trans-Africa Railway System and is intended to improve international trade between Nigeria, Niger and other North African countries.”
In addition, the US $ 225,120,000 provided by China Exim Bank will be spent on the Lagos-Ibadan railroad modernization project.
It is intended to support the construction of the branch line (Apapa-Tin Can Island Port).
Regarding the effects of the project, the federal government said: “The project serves to align the routes from the Apapa Port Terminal to the Tin Can Island Port and to strengthen economic activities in the ports of Apapa and Tin Can Island.”
The US $ 50,000,000 provided by IFAD will be spent on the government’s Value Chain Development Program – Additional Funding II.
She identified the exporting states as Anambra, Benue, Ebonyi, Niger, Ogun, Taraba, Nasarawa, Enugu and Kogi, while the geopolitical zones were listed as North Central, North East, South West and South East.
The expected impact, according to the government, is to “support a measurable increase in the reach of the program among 100,000 farmers, including over 6,000 and 3,000 processors and traders, respectively.
“It will also help mainstream issues that were not considered in the programming phase.”
The € 210,000,000 provided by the AFD will be spent on two projects – National Digital Identity Management Project (co-financed by the World Bank, AFD and EIB) – € 100,000,000; and the Kaduna Bus Rapid Transport Project – € 110,000,000.
The Bank of China’s $ 276,981,587 will be spent on setting up three renewable energy projects; Credit Sussie Group’s € 500,000,000 will be used as collateral for government guarantees for the issuance of Euro bonds so that the Bank of Industry can finance its projects; while the $ 62,120,000 provided by Standard Chartered Bank / China Export and Credit (SINOSURE) will be used to provide 17 MW hybrid solar energy infrastructure for the National Assembly complex.
The World Bank’s $ 3,250,000,000 will be spent on seven projects.
Part of Buhari’s letter to the National Assembly read: “I am writing on the above subject and am submitting the attached Addendum to the proposed 2018-2020 External Rolling Loan Plan for Senate review and simultaneous approval for it to take effect.
“The esteemed Senate President may recall that in May 2021, I submitted an application for the 2018-2020 loan plan for Senate approval.
“In view of other emerging needs and to ensure that all critical projects approved by the Federal Council from June 2021 are taken into account, I am hereby submitting an addendum to the proposed credit plan.
“The projects listed in the external credit plan are to be supported by government loans from the World Bank, the French Development Agency, EXIM Bank and IFAD totaling US $ 4,054,476,863 and US $ 710 million.
“A summary of some of the key projects in each of the six geopolitical zones and a summary of the expected impact on the socio-economic development of each of the six geopolitical zones are included here as Appendices II and III.”
Ndume is concerned about the speedy approval of Buhari’s loan applications by the National Assembly
Meanwhile, the chairman of the Senate Committee on the Army, Senator Ali Ndume, has raised concerns about the rate at which the presidential regime is borrowing foreign loans to finance budget deficits.
He also criticized the speed with which the federal parliament approves such loans when the proposals are sent by the president.
Ndume expressed his dismay at the speed with which the nation’s parliament has approved the loans at a news conference Thursday.
He said, “To be honest, I’m not an expert on debt research. You have debt management there.
“However, the rate of our borrowing is increasing and worrying. But the problem is not borrowing, as I always say, but what you do with what you borrow.
“For example, there is nothing wrong with borrowing money from the bank at reasonable interest rates to buy a car, especially if you have a family – wife and children who you need to take to school and you plan to do so gradually to repay with your salary. It’s fine because you can’t afford the money to buy the car yourself.
“Borrowing becomes a necessity in this situation. But if you can borrow money and can’t buy fuel, then you keep borrowing to buy fuel and giving the car as collateral to collect fuel … I don’t support that …
“It’s not borrowing. And this loan application that the President sent to the National Assembly is part of the approved external loan plan, but like I said … I’m just being very careful. ”
“First and foremost, you should look at what borrowing is for. It is necessary? Are the conditions good? Borrowing is not a crime unless debt service increases. I understand it hits 80, 90 percent. You have to be careful. You have to look for alternatives.
“There are certain bonds that are simply absolutely necessary, there are some that are not necessary. There are some that can be delayed. There are some where the terms can be negotiated or renegotiated. ”
However, Ndume stressed the need for a critical analysis of whether it was even necessary to take out loans.
He said, “Let’s look at the implications and see what the money is for.
“For example, we have an infrastructure deficit in this country and what we hear when people come to Abuja or when assignments are made, you cannot tell what is being done with it.
“Another thing I worry about is the way the Senate is handling it.
The Senate is by definition the house of deliberation.
“When something like this (loan application) comes, you don’t just say because you want to be good, you approve it. No.
“It should be viewed critically. Tick the “Ts”, tick the “Is”, ask questions, take the people you represent with you, ask if they agree. Not that we just sit down and just approve.
“We thought it might be good, but the way we do it, the people we represent look at us suspiciously.
“There are situations in which time is short and we have to act quickly, then we have to take people with us. I feel pain when they say “You guys again”.
“This is the last, I won’t do it again. They call us stamps and all that, but when there are certain things that can wait we need to analyze and not rush.
“We rushed to approve certain loans. So far we haven’t got the money. So why did we hurry? These are the questions that go through my head most of the time. ”
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