FG to Use External Loan to Fund Critical Infrastructure, Ahmed Insists

The Minister of Finance, Mrs. Zainab Ahmed yesterday insisted that the federal government would deploy external loans to fund critical infrastructure even as she admitted that the country is at the mercy of China when it comes to external borrowing.

Ahmed who made this known while appearing before the Senate committee on local and foreign debts headed by Senator Clifford Ordia, stated that $17 billion out of the $22.8 billion foreign loan being sourced by Nigeria will come from China.

According to her, Nigeria decided to approach the ChinaExim bank for the loan request when other lending institutions like the World Bank and the African Development Bank (ADB) were not favourably disposed to the request.

Ahmed while defending the decision of the present administration to borrow $29.96billion loan in order to fund critical infrastructure across the country explained that the Eighth National Assembly had approved about $6billion for the federal government out of the $29.96billion loan leaving a balance of $22.8billion.

She further explained that the federal government and some state governments are jointly requesting the loans from various lending institutions.

The bulk of the loan which is about $ 17billion, Ahmed stressed, is to be gotten from China-Exim bank while the balance will be sourced from lending institutions like the Islamic Development Bank, among others.

The Minister stressed that the loan will be used to fund major infrastructural projects currently being executed by the federal government.

“Others are the Mambila Hydro Power project ($4.9billion), Lagos-Kano modernisation project $4.1bn), Development Finance project loan being provided by a consortium of World Bank and African Development Bank agencies ($1.28billion). The facilities will support the setting up of the Development Bank of Nigeria through some development finance institutions in Nigeria to provide funds for small and medium size enterprises.