President Muhammadu Buhari expects to build a standard gauge rail line connecting Kano State in Nigeria with Maradi, Niger Republic, as part of the external loan requests he is seeking the National Assembly to approve for him.
Buhari had requested that the National Assembly approve new external loans totalling $4.054 billion and €710 million ($839 million) for his administration.
He also requested permission from the legislature for $125 million in grant components in the 2018-2020 external rolling borrowing plan.
The presiding officers of the National Assembly, Messrs Ahmad Lawan and Femi Gbajabiamila (Senate President and Speaker of the House of Representatives, respectively) read a letter to both chambers on Tuesday.
In a letter dated August 24, 2021, Buhari explained that the projects listed in the 2018-2021 Federal Government Borrowing Plan would be financed with sovereign loans totalling $4,054,476,863 and €710 million (839 million) from the World Bank, French Development Agency, EXIM Bank International Fund for Agricultural Development, Credit Suisse Group, and Standard Chattered/China Export and Credit.
According to the President, the letter included an overview of some major projects that would be funded by the loans, as well as a summary of the expected socio-economic impacts for each of the six geopolitical zones.
Five international organisations will jointly provide the $4,054,476,863 component of the loan, according to a breakdown acquired exclusively by a Punch reporter from the Ministry of Finance, Budget, and National Planning.
The World Bank has a $3.250 billion loan; China Exim Bank has a $225 million loan; IFAD has a $50 million loan; European ECA/KfW/IPEX/APC has a $190 million loan; Bank of China has a $276 million loan, and Standard Chartered Bank/China Export and Credit (SINOSURE) has a $62 million loan.
AFD – €210,000,00 and Credit Sussie Group – €500,000,000 will contribute the Euro component of €710 million, while the World Bank will supply the grant component of $125 million.
According to the document, the European ECA/KfW/IPEX/APC would spend $190,255,276 on Nigeria to Niger Republic train route.
The project was dubbed “Kano-Maradi SGR with a branch to Dutse” in the proposal, and the Federal Ministry of Transportation was listed as the implementing MDA.
“Financing cost which the lender requested to be capitalised” was written under the column for multilateral institutions.
On the expected impact of the project on the geopolitical development, the Federal Government wrote, “The project is to link Nigeria with the Niger Republic from Kano-Katsina-Daura-Jibiya-Maradi with a branch to Dutse”.
“It is part of the Trans-Africa Railway System and it is expected to improve the international trade between Nigeria, Niger and other North-Africa countries”.
The $225,120,000 granted by China Exim Bank will also be used to fund the Lagos-Ibadan Railway Modernisation Project. It will be used to support the building of the branch line project (Apapa-Tin Can Island Port).
“The project is to offer an alignment of routes from the Apapa Port Terminal to Tin Can Island Port and to increase the economic activity at the Apapa and Tin Can Island Ports”, the Federal Government claimed of the project’s impact.
The $50 million IFAD grant will be used to fund the government’s Value Chain Development Programme -Additional Financing II.
It designated Anambra, Benue, Ebonyi, Niger, Ogun, Taraba, Nasarawa, Enugu, and Kogi as implementing states, with North Central, North East, South West, and South East as geopolitical zones.
According to the government, the projected result will be “to support a measurable increase in the programme’s outreach to 100,000 farmers, including over 6,000 and 3,000 processors and traders respectively”.
“It will also support the mainstreaming of issues that were not considered at the stage of programme design”.
AFD will spend €210 million on two projects: the National Digital Identity Management Project (co-financed with the World Bank, AFD, and the EIB) – €100 million; and the Kaduna Bus Rapid Transport Project – €110 million.
The $276,981,587 provided by the Bank of China will be used to establish three power renewable energy projects; the €500,000,000 provided by the Credit Sussie Group will be used to provide a sovereign guarantee for the issuance of Euro bonds as collateral to enable Bank of Industry to fund its projects; and the -$62,120,000 provided by Standard Chartered Bank/China Export and Credit (SINOSURE) will be used to provide 17MW.
I write on the above subject and submit the attached addendum to the proposed 2018-2020 external rolling borrowing plan for the consideration and concurrent approval of the senate for the same to become effective,” Buhari said in his letter to the National Assembly.
The distinguished Senate President may recall that I submitted a request on the 2018-2020 borrowing plan for the approval of the senate in May 2021.
However, in view of other emerging needs and to ensure that all critical projects approved by Federal Executive Council as of June 2021 are incorporated, I hereby forward an addendum to the proposed borrowing plan.
“he projects listed in the external borrowing plan are to be financed through sovereign loans from the World Bank, French Development Agency, EXIM Bank and IFAD in the total sum of $4,054,476,863 and €710m and grant components of $125m.
A summary of some key projects in each of the six geopolitical zones and a summary on the expected impacts on the socio-economic development of each of the six geopolitical zones are attached herewith as Annex II and III”.