BEVERLY HILLS, November 18, (THEWILL) – The Senate on Wednesday approved a World Bank loan of $200 million (N40bn) for Lagos State government.
This followed the adoption of the report of the Senate Ad-hoc Committee on Local and Foreign Debts.
This is the last tranch of $600 million approved by the World Bank in 2010, to be disbursed in three tranches of $200 million each. The National Assembly in the 2010 and 2012-2014 borrowing plans approved the first and second tranches, respectively.
THEWILL recalls that the Senate had on September 29, received a letter from President Muhammadu Buhari requesting a special approval of Lagos State Development Policy Operation III (DPO III) under the Federal Government External Borrowing Plan (2015-2017).
Terms and conditions of the loan include: 25-years tenor, with five years grace period; 1.5 percent interest rate as well as 0.75 percent service charge.
The DPO has four pillars of fiscal sustainability; budget planning and preparation; budget execution, and investment climate.
Presenting the report on the floor of the Senate, Kabiru Gaya, chairman of the Committee, revealed that the third tranche facility had been captured in the 2015-2017 Medium Term Expenditure Framework (MTEF).
He said the key objective of the DPO facility from the World Bank was to support Lagos State to build systems and institutions to improve the quality of spending and strengthen investment climate, while maintaining fiscal sustainability.
He listed projects visited by the Committee, which the first and second tranches were spent on to include: Ikoyi Link Cable Bridge; Cardiac and Renal Centres at Gbagada General Hospital (LASUTH); network of roads in Apapa (Marina Road, Apapa GRA, Gaskiya Collage Road/Sari-Iganmu and Alaba and Orile-Iganmu Bust-stops); 27km light rail along the Lagos Badagry Expressway corridor to Marina.
Gaya said the third tranche would be used to finance light rail project, education, roads, bridges, and water and health sector, among others.
The projects, he said, will enhance great economic growth, employment generation and increased revenue generation capacity of the state.
According to him, the credit facility will consolidate on the gains made in key sectors of the economy in the state from the first and second tranches.
He noted that the third tranche would be used on projects like the Ultra-Modern Burns Centre, Cardiac and Renal Centre, Gbagada General Hospital; 27km light rail along Badagry Expressway corridor to Marina as well as 70 million gallon per day Adiyan water facility, among others.
In their separate contributions, Danjuma Goje and George Sekibo expressed concern that state governors were mortgaging their states in the guise of credit facilities, insisting that loans should be repaid within the tenure of an incumbent government to checkmate the trend.
Senate president, Bukola Saraki, who presided over the session, called for judicious use of credit facilities.
