NIGERIA AMMENDS BORROWING PLAN TO BOOST AMENITIES

NIGERIA`S GOVERNMENT AMMENDS BORROWING PLAN

The Federal Government has said that it  amended its borrowing plan for infrastructural development, adjusting upward, its proposed debt profile from $7.9bn to $9.3bn between 2012 and 2014.
Minister of Finance, Dr Ngozi Okonji-Iweala said the government was sourcing a total external loan of $9.3bn from 2012 to 2014 to develop infrastructure in the health, housing, agricultural,  education and transport sectors.
Dr.  Okonjo-Iweala, said the increase showed an amendment to the original $7.9bn proposed in the 2012-2014 Borrowing Plan the Federal Government earlier sent to the National Assembly. That is $1.4bn hike.
Official figures put the nation’s foreign debt profile at $6.2bn as at September 30, while the domestic debt profile stood at N6.3trillion in the same period.
Okonjo-Iweala gave the explanation on Monday, while appearing before the House Committee on Loans/Aids/Debts along with officials of the Debt Management Office to defend the amended plan.

Dr Okonjo-Iweala said out of the $1.4bn, the sum of $1bn was expected from a Euro Bond the government would issue in 2013 and that another $200m African Development Bank loan would be sourced for water projects in Rivers State.
The minister said that another $100m would be sourced from a Diaspora Bond “as a way of bringing our people to put their funds in the provision of infrastructure” in the country.
The amendments also included the swapping of a $300m loan sourced from the World Bank for the power sector to the provision of housing.
The minister said, “We have to really explain how this swapping came about so that people will not accuse us of taking money for power to housing.
Giving a breakdown of how the entire $9.3bn would be spent, the minister said that $450m would be earmarked for erosion and flood control projects in the South-East states and Cross River state.
According to her, $200m will be used to fund the FADAMA agriculture projects in some states in the North, while $150m will be spent on educational projects in Edo State.
Dr Okonjo-Iweala added that $234million would be committed to power projects in Zungeru and another $136m on water supply projects in Zaria, while $500m China-Exim Bank loan would go for the much talked about Abuja Light Rail Project.
Members of the Mr. Ajani Adeyinka led commi, however raised concerns over the implications of the proposed loans for Nigeria’s future.
Okonjo-Iweala told the lawmakers that government agreed to accept the loan offers after a thorough investigation indicated that they had “zero interest” rates, “soft terms” and a 40 year repayment period and another 10 years grace.
She noted that the offers came from multi-lateral agencies, which were different from “commercial” credit bodies like the Paris Club.
Okonjo-Iweala added that as a minister who helped in canceling the nation`s foreign debt  in 2005, she would not allow Nigeria to source for loans with negative effects for the economy.
“Nigeria has one of the lowest debts to GDP ratio in the world. Greece, Japan and others have up to 80 per cent debt to GDP ratio. In Nigeria, we are still below 20 per cent, which is a very comfortable position,” according to Dr Okonjo-Iweala.