Nigeria’s Minister of Information and Communications, Professor Dora Akunyili, said on Wednesday that the Federal Executive Council (FEC) has approved a loan of $500 million from the International Development Association (IDA) to finance the 2009 Supplementary Budget.
Speaking after the FEC meeting chaired by Nigeria’s Vice-President Goodluck Jonathan in Abuja, Akunyili said the decision would be forwarded, along with the supplementary budget, to the National Assembly for final approval.
“This credit is extended to Nigeria under the World Bank Budget Support facility for bridging the shortfall in the 2009 budget.
“The credit will be applied to address unemployment challenges, infrastructure bottlenecks, especially in the railway sector, power and textile rehabilitation.
“It will be used for support to development financial institution for on-lending to the real sector of the economy with particular focus on small and medium enterprises, low income housing and export- oriented industries to ensure economic diversification.
“The credit is highly concessionary and has a repayment period of 40 years with a 10 year moratorium.
“It attracts a service charge of 0.75 per cent per year on the actual draw from the credit and a commitment charge of 0.50 per cent per year on the undisbursed balance,’’ she said.
Defending the decision, Nigeria’s Minister of State for Finance, Mr Remi Babalola, said that the interest rate on the loan was very low and would not get the country into a debt trap as Nigeria’s current total external debt was $3.8 billion.
The FEC also approved contract for the replacement of one unit generator for Kainji Hydroelectric Power which broke down in September 2007.
Nigeria’s Minister of State for Power, Mr. Nuhu Wayas, who was also at the briefing, said a total of 5,400 megawatts was being generated currently in Nigeria.
He said the government was hopeful that the 6000 MW target by the end of the year would be achieved.
Source African Press Agency
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