Despite the International Monetary Fund (IMF) warning on Nigeria’s rising debt and taking loans from foreign sources, the Federal Government has approved another foreign loan of $247.3 million for infrastructure development.
While the IMF says that rising government debt level could make the global economy more vulnerable to another severe downturn, the Federal Government in a swift reaction had allayed fears over the nation’s rising debt profile, insisting that the loans taken so far are sustainable.
Nigeria’s domestic and foreign debt had jumped from N12.12 trillion in 2015 to N24.38 trillion in 2018.
According to the Minister of Finance, Zainab Ahmed, Who briefed the press at the end of Federal Executive Council (FEC) meeting,the loans are $150 million from African Development Bank (ADB) for rural electrification projects; $50 million from Africa Grow Together Fund for more electrification projects; and $20million from French Development Agency for onward lending to Lagos State for strategic urban roads rehabilitation.
The council also approved $27.3 million IADE facility, a concessionary loan, which is part of the North Core Dorsal regional transmission project. The project is part of the pipeline for the West Africa power pull priority projects.
The total sum of $640 million loan for West Africa power pull priority projects aims to connect Nigeria, Niger, Benin Republic, Togo, Burkina Faso with a high voltage 330 kilowatts transmission line, to facilitate energy trade among participant countries.
She explained that the rural electrification projects have four components and that eight Nigerian universities would benefit from the scheme.
Ahmed said: “Council approved three memos for Ministry of Finance. First, it approved $150 million loan facility from African development bank and $50 million loan from African Grow Together Fund to finance the Nigeria electrification project. The project is a nation wide initiative to be implemented by the rural electrification agency. The project aligns with the strategy of the Federal Government on electrifying rural community. The project has four components, first is solar hybrid mini-grid for rural economic development, the second is productive appliances equipment for up-grid communities and the third is energising education while the fourth component is institutional capacity building.
“The impact of the project when fully implemented, about 500,000 people will be able to have access to electricity for about 105,000 households. The maximum power that will be generated will be 76.5 megawatts installed generating capacity part of which is 68,000 megawatts of solar.
“Eight universities will benefit from this scheme and about 20,000 small, micro, medium enterprises across different communities in the nation.
“The second approval the north Core dorsal regional transmission project. This is a project that is part of the pipeline for the pipeline for the west Africa power pull priority projects. The intention is for the creation of regional power pull in the region of west Africa. The post project aims to connect Nigeria, Niger, Benin Republic, Togo, Burkina Faso with a high voltage 330 kilowatts transmission line, to facilitate energy trade amongst participants.