Why Senate should approve Buhari’s $30.54 billion loan request – Debt Management Chief

Airtel Nigeria Call services
Social sharing

The Nigerian Senate should approve President Muhammadu Buhari’s request for authorisation to borrow $30 billion (about N9.61 trillion), and should do so quickly, the Director General, Debt Management Office, Abraham Nwankwo, has said.

The Senate turned down the president’s request on Tuesday, asking for all relevant documents to be submitted.

But, Mr. Nwankwo, who spoke on a Channels TV guest program, said the loan was so important and the government needed to take advantage of the soft terms of the loans covering three years, to help address the huge infrastructure deficit in the country.

The DG said the $30 billion was actually for a three year-period, running from 2016 to 2018, to be repaid in 20-30 years’ time.

With this arrangement, he said it would not be difficult for the country to repay.

Although the DMO boss said he had earlier advised the Federal Government not to exceed $22 billion limit in its loans from 2017, he said the $30 billion was comparatively lower.

“When you are in the kind of economic situation the country has found itself, you have to decide where you want to start addressing the problem. The most critical point to start is to deal with infrastructure problem.

“If you deal with infrastructure problem, the cost of power, transportation and most other goods and services will be forced down on the long run. The development will have a significant impact on the price level in the economy,” he said.

 

Highlighting some of the other attractive components of the proposed loans, Mr. Nwankwo said that the low concessionary interest rate, at about 1.5 per cent, was different from previous loan arrangements (under previous administrations) with the Paris Club of creditors, which came with floating interest rates as high as 18 per cent.

In his request to the National Assembly, President Buhari had said the loans, which also include a $575 million World Bank facility, would be for projects cutting across key sectors of the economy.

On how the $30 billion would be spent, Mr. Nwankwo said $10 billion would be spent per annum for three years, targeted at building infrastructure in all states of the federation, with the main focus on power generation, rail and road renovation and construction.

The projects, with special emphasis on infrastructure development, were in the agriculture, health, education, water supply sectors as well as those to facilitate growth in the economy and employment generation, poverty reduction through social safety net programs and governance and financial management reforms.

Mr. Nwankwo also said that the facility would help revive strategic infrastructure like railways, to smoothen movement of heavy goods across the country.

With adequate infrastructure, he said the impact on the economy would be felt by all Nigerians, as the general price level (the consumer price index measuring price level and the rate of inflation) would be brought down.

“The way to go is to have adequate infrastructure, power road, transportation ICT. All these would make the cost of production in the economy much lower, while the cost of goods and services will be lower and inflation forced down. When inflation is down, monetary policy rate will be lower, translating to a lower lending rate,” Mr. Nwankwo explained.

– Premium Times

About 9News Nigeria 6531 Articles
9News Nigeria, Global Breaking News Platform, News from Nigeria, News from Africa, Nigerian News, African News

Be the first to comment

Leave your comment

UBA Bank
  • BREAKING!! China Seals Off Entire Village After One Person Died Of Bubonic Plague Disease

    Social sharing

    Social sharingThe unnamed patient died of circulatory system failure after contracting the bubonic plague, health authorities have confirmed, although it’s unknown how they caught it. Read more

  • Genetically Modified Mosquitoes

    Activists oppose release of Genetically Modified Mosquitoes (GMM) in Africa

    Social sharing

    Social sharingIn Summary • Global Prolife Alliance claims the technology used on the mosquitoes is “very” harmful. • The organisation leader, Dr Philip C. Njemanze, Read more

  • Governor Sanwo Olu Commissions Nigerian First Indigenous Medically Certified Face Mask Factory in Lagos

    Governor Sanwo Olu Commissions Nigeria’s First Indigenous Medically Certified Face Mask ‘O-Care’ Factory in Lagos

    Social sharing

    Social sharingLagos state governor, Babajide Sanwo Olu has on Thursday 30th July 2020 commissioned Nigeria’s first indigenous medically certified face mask factory in Lagos. The Read more

  • BREAKING: COVID-19 cases rises to almost 40,000 in Nigeria

    Social sharing

    Social sharing Nigeria is just a little figures before hitting the 40,000- mark of COVID-19 cases.In the latest information disclosed by the Nigeria Centre for Read more

  • Coronavirus: Countries with highest COVID-19 Deaths – WHO Reveals

    Social sharing

    Social sharingThe World Health Organization, WHO, regional office for Africa in Brazzaville, Congo, has revealed countries with the highest coronavirus (COVID-19) death cases. Africa has Read more