Senate Approves FG's $1.8bn, States $750m External Borrowing

Meanwhile, the Senate has approved the $1.806 billion Federal Government 20162018 external borrowing (rolling) plan for the Lagos - Kano railway modernization project, and the reconstruction and rehabilitation of the North East.

The railway project, which includes the Lagos-Ibadan segment double track is to be funded by China Export-Import Bank for $1.231 billion, while the Northeast rehabilitation is to be funded by the World Bank for $575 million.

The Senate also approved the $750 million medium term external loan requests for six states, out of the FG's request of $1.49billion for 10 states.

The states whose loan requests were approved are Abia, Ebonyi, Enugu, Kano, Ondo and Plateau.

The approvals followed the adoption of the reports of its Committee on Local and Foreign Debts chaired by Senator Shehu Sani ( Kaduna Central).

The terms of the China EXIM bank loan include a maturity tenure of 20 years with a moratorium of seven years at interest rate of 2.5 percent. It also includes a management fee of 0.5 percent, a commitment fee of 0.2 percent, and duration of three years.

The committee in its report observed that the railway project would link the North to the South by rail and promote trade, create jobs and also reduce pressure on roads infrastructure.

"That the Senate do recommend the immediate negotiation for the Eastern corridor (Port Harcourt - Maiduguri) and submit same for approval by the National Assembly," it read.

The committee also recommended for approval by the Senate, the remaining segments of the Rail Modernisation Project as soon as they are approved by the Board of China EXIM Bank. The segments are Kano-Kaduna segment, the Lagos - Calabar segment (coastal railway project), and the Port-Harcourt - Maiduguri segment (eastern corridor).

It added that the World Bank funded projects would facilitate the much needed rehabilitation and resettlement of the people of the region back to their respective homelands and allow schools to be reopened.

The breakdown of the utilisation of the $575 million World bank loan includes $125 million for polio eradication support and routine immunisation project, $75 million for community and social development project, and $125 million for Nigeria States Health Programme Investment project.

Others are $100 million for State Education Programme Investment Project, $100 million for Nigeria Youth Employment and Social Support Project and $50 million for Fadama III project.

In its report on the loans for the six states, the committee said the loans would facilitate the provision of critical infrastructure and social amenities for the residents and citizens.

It however said there was a need for phased approval of the loan requests for the ten states, which include Ogun, Jigawa, Kaduna and Katsina.

A breakdown of the approved loans are $70 million from African Development Bank (ADB) for Ebonyi Ring Road Project (to be co-financed by Islamic Development Bank), $200 million ADB facility for Rural Access and Mobility Project (RAMP) in Abia State, and $200 million IDB loan for Kano State Integrated Agricultural and Water Resources Development.

It also approved a $100 million request for Enugu and Kano from the French Development Agency for the third National Urban Water Sector Reform (NUWSRP-III).

"That the remaining four states in the borrowing plan be deferred," the report read.

The Senate directed the relevant committees to ensure effective oversight on the implementation of the projects for which the loans were approved.

In another development, the Senate passed the bill to establish the Nigerian Financial Intelligence Agency (NFIA) which would grant operational, legal and financial autonomy to the NFI unit.

The bill, if signed into law, would decouple the NFIU from the Economic and Financial Crimes Commission (EFCC) and domicile it in the Central Bank of Nigeria. The agency would however operate independently without control from the apex bank.

The bill also places the NFIA on first line charge.

The swift passage of the bill is borne out of the Senate's determination to avert the expulsion of Nigeria from the Egmont Group, a network of 154 national financial intelligence units, which suspended Nigeria in early July 2017.

The bill was first presented to the Senate last week, and its passage was accelerated to avoid a blacklisting of Nigeria’s financial system.

In his comments following the passage, the Deputy Senate President, Senator Ike Ekweremadu lauded his colleagues for the swift passage of the bill.

“We believe that this is a major contribution in the fight against corruption in Nigeria and we believe the international community will take us more seriously for taking the step today. I hope that Egmont group will also take the decision to lift the suspension on Nigeria because of this step we have taken today,” he said.

“The fact of relocating the agency under the CBN will give other agencies sufficient access to the job of this agency in such a way that there will be no control of the NFIU that will lead Nigeria to another round of suspension. We have taken the right step especially when it is considered that what we have done today is in consonance with what is done in other countries of the world where we have similar agencies,” Ekweremadu added.

Meanwhile, the lawmakers have embarked on their annual six week long recess, to resume on September 19, 2017.