NEC Approves $9Bn Debt For Nigeria

Okonjo-IwealaThe National Economic Council (NEC), rose from its monthly meeting on Thursday, approving the country’s borrowing plan for 2013-2014, totaling about US$9 billion.

NEC comprises the 36 state governors, ministers of National Planning, Finance, FCT, CBN governor and is chaired by the Vice President.

Briefing State House correspondents after the statutory meeting, Governor Peter Obi of Anambra state said the loans would be sourced from different international funding agencies and would be strictly for developmental projects.

He explained further that the total portfolio cut across both federal and state governments. He said about US$450 million of the total loan package will be sourced for the eastern states, including Edo and Cross Rivers to fund erosion projects.

“The Coordinating Minister for the Economy (CME) briefed the Council on the current facilities made available by different international funding organizations including Islamic Development Bank, IDA, African Development Bank, French Development Agency as well as Chinese and Indian Exim Banks totaling about $9 billion dollars for projects development.

“The facilities which have up to 10 years moratorium and 40 years repayment periods are available to both the Federal and State Governments to fund high impact projects towards improving infrastructure, agriculture and employment generation”, governor Obi announced.

According to him, the National Assembly had already approved the loan portfolio, adding that states are now expected to “meet the requirements for the loans and to ensure that the facilities are used to fund meaningful projects in their states”.

Also, Governor Liyel Imoke, said the Council received the report of the Ad-Hoc Review Committee on the Re-Investment Plan in the Power Sector. He said the committee which he headed recommended the need to urgently source and disburse N3.37 billion to ensure the closing of the huge gap between the required power generation and transmission capacity.

According to him, “the Committee highlighted the over $4 billion NIPP investment already made in generation which has produced  additional 4,774MW  generation capacity by NDPHC and would have raised the overall generation capacity in Nigeria to 9,582 MW in December 2013 in line with the nation’s updated generation capacity target of 20,000 by 2020,

“It further noted that investing in the needed transmission infrastructure would ensure, among other benefits, the needed return on investment, the maximization of  proceeds from the sale of the generation assets, improved GDP growth rate as well as ensure effective distribution of generated power to the ultimate consumers.
“As a means of solving the envisaged significant transmission constraint by the end of this year and bridging the gap for counterpart funding in hydro plants, the report recommended the following:
“Utilisation of the proceeds from sale of generation assets for reinvestment in transmission and hydro projects; Disbursement of $1.65 billion to fund critical transmission infrastructure; $1.72 billion to fund hydro generation; the sourcing and immediate release of USD 3.37 billion to bridge funding pending the realisation of proceeds from generation asset sale”, he explained.

Governor Imoke stated that NEC commended the Committee for the detailed report and recommended the implementation of the recommendations to ensure adequate evacuation of generated power towards meeting effective power demand in the country.

“The Council also recommended that 11 small dams spread across the country should be accommodated in the funding plan because of their potentials towards boosting power, water supply and agriculture in the country”, he added.

Reporter: Akin Akande, Abuja