Clement Nwoji
25 November 2008
Abuja — World Bank loans to Nigeria under the Bank's assisted projects since 1999 to date is about $3.5 billion including a recent $780 million loan granted for three projects.
The agreements for the three projects for the $780 million loan were endorsed yesterday and the projects are the Community and Social Development Project (CSDP), the Third National FADAMA Development Project (NFDP-III) and Federal Roads Development Project.
Minister of Finance, Dr. Shamsuddeen Usman signed on behalf of the Federal Government.
Speaking at the formal signing of the agreements, Shamsuddeen said that there was nothing wrong in obtaining a loan, adding however that what matters was the utilization of the loan.
"We should be less emotional about these projects.
There is nothing wrong with borrowing, if you use it well, you benefit.
It is the kind of loan and the way you utilize it that matter. Let's base our assessment on actual observation. By next year, we will organize a tour for you to see the effects of the projects, he said.
He explained that the project would assist in tackling issues of food security, poverty reduction in the rural areas and transport, which constitutes the key areas of the current administration's Seven-Point Agenda.
On the CSDP, Usman said the total cost of the project targeted at increasing access by the poor people to improved social and physical infrastructure and services is $200 million, and is to be utilized by 22 states and the Federal Capital Territory, Abuja.
Some of the benefiting states are Adamawa, Edo, Ekiti, Enugu, Gombe, Imo, Katsina, Kogi, Kwara, Nasarawa, Niger, Ogun, Oyo, Plateau, Taraba, Yobe, Zamfara and the FCT.
Also, he said the project development objective of the NFDP-III is to increase the income of users of rural water resources on a sustainable basis and would be implemented in the 36 states of the federation and the FCT under the coordination of the Federal Ministry of Agriculture and Water Resources over a period of five years, with effect from next year to 2013.
The total project cost is $450million out of which $250 is from International Development Association (IDA) credit while the balance will be contributed by federal, states, local government and communities.
Under the counterpart funding arrangement, it is expected that the federal government will contribute $23million, State Governments $77million, Local Governments $40million while the relevant community contribution will be in kind and the Global Environmental Facility (GEF) will provide a grant of $7million.
Usman said the objective of the Federal Roads Development Project is to reduce passenger travel time and vehicle operating costs on targeted federal roads, as well as assists the federal government to manage the country's federal road assets in a sustainable manner all seasons.
He said the scope of civil works in the project would, among others, lead to rehabilitation and upgrading and long term maintenance, through long term output performance contracts of the Mokwa-Bida-Lambata-Suleja Road, Samamiya-Bauchi-Gombe-Biu road, Benin-Ifon-Owo-Akure-Ilesha Road and Enugu-Abakiliki/Ogoja junction-Mfum Road.
According to him, the project would cost is US$330million. The project, which would be implemented over a period of eight years, on performance-based contract basis, will focus on rehabilitation and upgrading Unity Roads, through carrying out civil works and provision of technical advisory services.
"As you are aware, the Federal Government of Nigeria and the International Development Association (IDA) have negotiated the Financing Agreements for the CSDP, NFDP-III and FRDP in the amounts of SDR 121.5million (US$330million equivalent) respectively.
"The IDA Credit, which is highly concessional, is payable in 40 years and attracts a commitment charge of not more than 0.5 percent per annum on the un-disbursed amount while a service charge of 0.75 percent per annum is payable on the amounts withdrawn; the credit also has a 10-year moratorium.
The World Bank Country Director, Mr.Onno Ruhl expressed satisfaction on the current extent of implementation of the Bank's assisted projects, noting that communities now choose relevant to their needs.
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