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Politics of Wednesday, 11 March 2020

Source: www.mynigeria.com

$22.7 billion loan will not be embezzled, Fed Govt. assures citizens

President, Major General Muhammadu Buhari (retd.) President, Major General Muhammadu Buhari (retd.)

The Federal Government has promised to use the foreign loans of 22.7 billion dollars to better its citizens.

This was contained in a press statement circulated by the Government via its Twitter handle, @NigeriaGov.

Discrediting the rumours going round that a portion of the loans would be mismanaged or paid to contractors, the Federal Government clarified that it deals only with bilateral and multilateral lenders.

It also revealed that the money was obtained from multilateral and bilateral lenders. Giving more details about the loan, it said: "they are concessional / semi-concessional, long-tenored and are for the purpose of financing infrastructure and other developmental social projects all of which have long-term multiplier effects in terms of job creation, business opportunities and overall increase in Nigeria’s Gross Domestic Product.

"The New Borrowing is consistent with the subsisting Debt Management Strategy which seeks to replace short term high-interest cost domestic debt with low-interest long-term external debt and is one of the measures that is being implemented to moderate the level of Debt Service.



"The achievements in this regard are evidenced in the declining share of Domestic Debt in the Total Public Debt from over 83% in December 2015 to about 68% in June 2019

"It bears repeating that many of the projects in the approved Borrowing Plan are for the development of infrastructure in the areas of roads, railways, waterways and power which will help to unleash the potentials of the Nigerian economy.

"Other loans such as those for the educational sector will contribute to the development of Nigeria’s human capital, while Agriculture loans will be used to diversify the economy. There‘ll also be funding for Development Finance Institutions to enhance access to finance for MSMEs.

"Each of the Loans listed in the Plan will be negotiated on individual basis, with the various lenders—it is NOT a single loan. The Loans will also not be disbursed at once even after all approvals have been received & contracts signed. This is the practice for project-tied loans," the statement read.