Sources at the World bank’s headquarters in Washington DC, United States of America, revealed that the Executive Board of the bank will determine whether to approve the loan or otherwise.
Barring any change of plan, the World Bank will, tomorrow, deliberate on the loan request by Nigeria, said to be slightly above $1 billion. It was gathered that the original figure was about $1.8 billion but the $750 million that was meant for the Power Sector Reform (PSR) was dropped because the Federal Government did not give the needed green light for its inclusion in the current consideration.
Only two weeks ago, the federal government revealed that it was turning its attention towards China for the realisation of its External Borrowing Plan because some lending institutions, including the World Bank, were not forthcoming on the matter. Specifically, appearing before the Senator Clifford Ordia-led Committee on Local and Foreign Debts on February 4, Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed revealed that the Federal Government was seeking $17 billion loan from the China Exim Bank as part of the original $29.96 billion 2016 – 2018 External Borrowing.
While defending the loan proposal, she said the 8th National Assembly had approved about $6 billion for the Federal Government out of the $29.96 billion loan, leaving a balance of $22.8 billion. According to her, the entire loan was not for the Federal Government, as it included requests by some state governments. Mrs. Ahmed also revealed that while seeking the bulk from the China Exim Bank, the federal government was also looking at receiving some from the Islamic Development Bank, among others.
She said the country had no issue with its current debt profile but with its dwindling revenue which could not fund the various projects expected to have meaningful impact on the lives of Nigerians. On the utilisation of the loan, she told the Senate Committee: “The funds would be channeled to the funding of infrastructure which will enhance the productivity of our economy. Other projects are in heath care and education. It also included projects for the rehabilitation of the North East geo-political zone. “Others are the Mambila Hydro Power project ($4.9 billion), Lagos-Kano modernisation project $4.1 billion), Development Finance project loan being provided by a consortium of World Bank and African Development Bank agencies ($1.28 billion.) “The facilities will support the setting up of the Development Bank of Nigeria through some development finance institutions in Nigeria to provide funds for small and medium size enterprises. This will make access to finance to SMEs easier, help them to grow and help more Nigerians to come out of poverty.