The Nigerian Federal Executive Council (FEC) Wednesday approved a sovereign warrant for a loan of about US$242.2 million for the Lagos State Government to support the development of infrastructure and other services as well as supporting secondary education in the state.
Lagos State, which is Nigeria’s commercial capital, had in 2010 got approval from the International Development Association (IDA), a World Bank agency, for a loan of US$600 million for the financial management and development of infrastructure in the state.
The loan was approved by the Federal Executive Council in 2010.
Nigerian Minister of Information, Mr. Labaran Maku, told journalists at the end of the Council meeting, presided over by President Goodluck Jonathan, that of the total amount of US$242.2 million, US$200 million would be used to for financial services and infrastructure and the remaining US$42.2 million to support secondary school education in the state.
The loan, which is repayable after 25 years, has a moratorium of five years. The costs include a 0.5 per cent commitment charge, 0.75 per cent service charge and interest rate of 1.25 per cent per annum.
Maku said “the Council has also asked the Federal Ministry of Finance to provide it with the details of existing loans by every state in the country which will guide us to ensure that when we approve that there is a history of commitment and execution of project for the development of the various states.
“In the case of this loan, the World Bank will monitor the implementation of the project and we believe that the Debt Management Office (DMO) as well as the Ministry that has approved these loans and provided the warranty would also monitor the report to see that these projects are implemented and that the people of Lagos actually benefit from the expenditure.
“The federal government is warrantor and we indeed as a federal government have continuously supported by providing the warrant for the loan, by ensuring negotiations with the World Bank and agencies that the loan is granted to the state to support its development.”