President Muhammadu Buhari |
The order day, the minister disclosed the idea to take long-term loans at a very low interest rate from the African Development Bank (AfDB), World Bank, China Exim Bank and other specific financial institutions across the world.
She said: “We
have a very conservative borrowing programme, and we must borrow to construct
rail – the rail we have now was done in the colonial era – and there has
been really significant upgrade. We will borrow sustainably and conservatively
to make sure we don’t burden future generation.”
In order to clear the air on the
borrowing plan, Mrs. Adeosun clarified that her borrowing plan was clearly
different from what obtained in the past where government borrowed to pay
salaries, adding that the government would be borrowing to invest in
infrastructure and generate additional revenue.
According to the presidency, the
borrowing plan was awaiting the approval of the National Assembly. Apart from
the concessional loans, the Federal Government said it would tap into the
Eurobond market in “due course”, to seek funding for healthcare, mining, power
and agriculture.
The 2016 budget, with an expansionary outlook, has a deficit in excess of N3 trillion, which the Federal Government intends to use to stem both internal and external borrowing. With Nigeria in recession, the Ministry of Finance and the Presidency are working hand-in-hand to revamp the economy in the shortest possible time.
The 2016 budget, with an expansionary outlook, has a deficit in excess of N3 trillion, which the Federal Government intends to use to stem both internal and external borrowing. With Nigeria in recession, the Ministry of Finance and the Presidency are working hand-in-hand to revamp the economy in the shortest possible time.
Mrs. Adeosun stated that much of the
external borrowing would be devoted to provision of infrastructure including
rail, power, road and health to booast government diversification agenda.
Recall that recently the government awarded the China Civil Engineering Construction Corporation (CCECC) a $1.68 billion contract to upgrade and modernise the Kano-Kaduna segment of the Lagos-Kano rail line.
Recall that recently the government awarded the China Civil Engineering Construction Corporation (CCECC) a $1.68 billion contract to upgrade and modernise the Kano-Kaduna segment of the Lagos-Kano rail line.
In context, the rail line would move
as fast as travelling from Lagos to Ibadan in 48 minutes and is expected to be
faster than the Kaduna-Abuja rail line. CCECC also signed a contract worth $3.4
billion for the construction of the Calabar-Port Harcourt Segment 1, which aims
to extend the rail line between Calabar and Port Harcourt to Onne Deep Seaport.
The Abuja-Kaduna rail line was delivered on July 13, 2016, while the
Lagos-Ibadan segment remain uncompleted.
The immediate past Governor of
Rivers State and current Minister of Transportation, Rt. Hon. Rotimi Amaechi, said the newly signed projects would be
concluded in two years. On Friday, CCECC said the project would be concluded in
36 months (three years), contradicting Amaechi’s position. The same Chinese
firm also announced it won the $1.851 billion Kano city light rail project.
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