Nigeria gets $3bn World Bank loan

[Muhsin]

Written by Idris Ahmed, on 09-11-2008 23:58

A few years since Nigeria exited from the Paris and London Club debt traps, the World Bank announced at the weekend that it will grant this country a loan facility of $3 billion for the development of infrastructure as well as eradicating poverty.

The new loan which would be drawn in 2009 and 2011, will be granted under the bank's International Development Assistance (IDA) scheme, according to Simeon Ehui, the Sustainable Development Sector Manager of the World Bank Office in Nigeria.

Ehui spoke during a fact finding visit to the bank by 15 foreign journalists and alumni of the International Institute for Journalism (IIJ) led by the Head of the Institute, Ms. Astrid Kohl. The loan, which is tied to developmental projects such as education, health, roads, and agriculture, will be disbursed at the rate of $1 billion each year till 2011.

Ehui represented the World Bank's Country Director, Mr. Onno Ruhl at the occasion. He said, "The $3 billion for three years is a concessionary loan with zero interest rate. It will not add any burden to Nigeria. The loan has been offered to Nigeria because of the massive improvement in the economy."

The loans, though interest free, attract a service charge and non-utilisation fee of 0.5 and 0.75 per cent respectively, with up to 35 to 40 years repayment period, including 10 years' moratorium. 

According to the bank, Nigeria has the World Bank's largest portfolio in Africa, with a total $2.5 billion in 23 on-going projects ranging from agriculture, health, communications, roads, power and water, among others.   

Ehui said the World Bank's commitment in Nigeria has grown since 1999 to $2.2 billion in 2006 and over $2.5 billion currently.   

He said, "The improvement in the bank's commitment in Nigeria over the years is not by chance. It is as a result of improved governance and economic performance."   

He said Africa has been offered a third seat on the bank's Executive Board, bringing the total number of representatives on the board to 25 as against 24. "The good news is that Africa now has an additional seat on the World Bank board. Which country or region that is going to take the seat is not yet known. It is still being finalised," he said.

Meanwhile, Minister of State for Finance Remi Babalola has said Nigeria requires $100 billion to develop her infrastructure. He said this at the end of the seventh session of the Honorary International Investor Council (HIIC) in Abuja, saying without addressing the infrastructure gap, this country's foreign investment drive would be hampered..

Babalola also said the Niger Delta region must be turned around from an area of perennial conflict to a nucleus of development, in order to encourage foreign direct investment. "If we continue to move in this direction then the country will achieve its targets contained in the Vision 20-20 agenda", he said.

http://www.dailytrust.com/content/view/21468/238/