Emma Ujah
10 November 2008
The World Bank has offered Nigeria $3 billion facility to enable the President Umaru Yar'Adua improve education, health, roads, and agriculture with a view to reducing the nation's poverty rate and living standards of the people.
If accepted by the president, the loan would be provided under the International Development Assistance (IDA) and would be in three tranches of $ 1 billion, annually, between 2009 and 2011.
An official of the bank's Country Office, Mr. Simeon Ehui, told visiting foreign journalists at the weekend that the offer was the organisation's way of responding to Nigeria's critical infrastructure needs and that being an IDA arrangement, the facility would attract no interests.
His words, "the $3 billion for three years is 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".
Though concessionary, IDA facilities attract service charge of 0.5 per cent and non-utilisation fee of 0.75 per cent. Such loans come with a re-payment package lasting between 35 to 40 years and a 10-year moratorium.
Mr. Ehui, who represented the Country Director of the bank, Mr. Onno Ruhl, explained that Nigeria was eligible to receive the $3 billion to support development projects that would alleviate poverty and improve the living standards of Nigerians.
The World Bank's offer is coming at a time the Federal Government is sourcing private sector operators with whom to collaborate under the Public Private Partnership (PPP) in the provision of power, rails, roads, water and other infrastructure facilities.
The economic team of the Federal Government had said as much as $ 100 billion would be required to provide some of the infrastructure needs of the nation.
The Minister of State for Finance, Remi Babalola restated this in a communiqué at the end of the seventh session of the Honorary International Investor Council (HIIC) meeting in Abuja, at the weekend.
If the Federal Government takes the loan, it would push the country's foreign debt portfolio to about $ 6. 5 billion. The current figure is about $3.5 billion.
The World Bank official disclosed that the organisation's current commitment in Nigeria was over $2.5 billion and that the Federal Government was being encouraged to take more loans "as a result of improved governance and economic performance".
While contributing, the Chief Economist of the World Bank Office in Nigeria, Mr. Volker Treichel said a double digit growth rate was realisable by the country but stressed the need to address the problem of electricity in the country.
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