Senate Approves Outstanding 2010 External Borrowing Plan

Senate Approves Outstanding 2010 External Borrowing Plan
Obiora Ani, Abuja

The Senate has approved the outstanding Three point Seven Billion Dollars External Borrowing Plan for 2010 by the Nigerian Government.

The approval on Wednesday was based on the recommendations of its joint committee on Finance and National Planning, Economic Affairs and Poverty Alleviation on the amount, being the part of a Four point Five Billion Dollars 2010 External Borrowing plan.

The fund

Senator Ahmed Makarfi, while submitting the report, said the committees' recommendation was for the final approval of outstanding 2.564 billion dollars of the total sum sought.

The senate, on December 20, 2010, initially approved 1.137 billion dollars of the  3.702 billion dollars.

''The fund is for the federal government and 16 states to access funding facilities from Islamic Development Bank; the International Development Association; the French Development Agency and the Indian Line of Credit.''

Makarfi said the federal government and the 16 states were involved in the bi-lateral and multi-lateral relationships with the aforementioned lending agencies.

In his words, “The outstanding 2010 external borrowing plan is made up of 12 projects, eight of which belong to the 16 states , three for the federal government while the remaining one is to be shared between states and the federal government.'' Makarfi said.

With the approval, the Nigerian government and some state governments would access funding facilities from the Islamic Development Bank, the International Development Association, the French Development agency and the Indian Line of Credit, to finance Power and Energy projects, Rural Access and Mobility projects, Special Intervention for Infrastructural Development as well as Social Development Programmes.

The outstanding 2010 external borrowing plan is made up of twelve projects, eight to be executed in some states, three by the government while the remaining one is to be shared between the states and the central government.

Borrowing concessions 

He noted that all the borrowings under review have more than 13 per cent concessions as required by the borrowing guideline.

This is a departure from the previous external debt pattern, whereby Nigeria borrowed from the international capital market under severe and unfavourable terms and conditions.

Makarfi said that about 75 per cent of the loans attract 0.75 per cent interest rate per annum, while the remaining 25 per cent attracts interest charge not exceeding two per cent per annum.

 He held that the projects to be funded with the proceeds were desirable and would improve the state of infrastructure of benefitting states if properly applied.

The committees also approved 152 million dollars being sought by federal government to facilitate PHCN's power/energy project.

With additional report from NAN/Williams/Yinka