Minister of Finance, Kemi Adeosun, has given a detailed breakdown of how government plans to spend the $29.96 billion foreign loans, for which President Muhammadu Buhari asked the National Assembly for approval on Wednesday.
Adeosun said through an emailed document on Thursday that the amount was designed to address infrastructure deficit in the country.
Of the total, Federal Government would borrow $25.8 billion while states will jointly borrow $4.1 billion.
“The external borrowing plan is a three year-plan covering proposed projects for 2016 – 2018. As such, the borrowings will be phased over the three year-period.”
The Federal Government’s portion would be spent on: Mambilla Hydro project to gulp $4.8 billion; Calabar- Port Harcourt- Onne Railway Modernisation $3.5 billion; Abuja Mass Rail Transit Phase 2- $1.6 billion; Lagos-Ibadan double track railway- $1.3 billion; Kano-Kaduna double railway track- $1.1 billion; Others (unspecified) $6 billion.
Abuja would also spend $3.5 billion on Budget Support; $2.1 billion on Education and Health; $0.9 billion on Agriculture and $0.2 billion on Economic Management and Statistics.
On the part of states, they will spent $0.1 billion on Education and Health; $0.3 billion on Agriculture and $0.2 billion on Economic Management and Statistics.
She explained that the borrowings are highly concessional (non-commercial), with low interest rates and long tenors.
“The funding is being sought from multilateral institutions including the World Bank, Africa Development Bank (AfDB), Islamic Development Bank (IDB), Japan International Co-operation Agency (JICA) and China EximBank,” the minister added.
Of the funding sources only the planned Eurobond issuance in the international capital markets is the only commercial source of funding, the statement maintained.