Minister of Finance, Dr. Ngozi Okonjo-Iweala
Efforts by the Federal Government to boost critical infrastructure received a boost Wednesday when it signed an agreement with the China Exim Bank for a $600 million facility to finance the Abuja Light Rail project and the Galaxy Backbone information and communication technology (ICT) infrastructure.
Of the loan facility, the Abuja Light Rail will gulp $500 million while the Galaxy Backbone ICT infrastructure is to take $100 million. The two projects are expected to be completed by 2015.
The loan agreement was signed in Beijing, the Chinese capital, on behalf of Nigeria by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Managing Director of China Exim Bank, Mr. Sun Ping.
According to a statement issued by Mr. Paul Nwabuikwu, Okonjo-Iweala’s Senior Special Assistant on Media, the Minister of Aviation, Ms Stella Oduah; Minister of the Federal Capital Territory (FCT), Bala Mohammed; and Minister of State for Works, Ambassador Bashir Yuguda, were in the team, which worked out the final details of the agreement with the officials of the bank.
Also present were the Director-General of the Debt Management Office (DMO), Dr. Abraham Nwankwo, and Special Adviser to the President on Performance Monitoring and Evaluation, Prof. Sylvester Monye.
“The commitment of the Chinese bank to the financing of the third project – the construction of four state-of-the-art airport terminals in four cities across the country – has also been obtained and the agreement is expected to be signed within the next few weeks.
“The terminals, which will cost $500 million, will be located in Abuja, Kano, Port Harcourt and Enugu.
“Yesterday’s signing was the culmination of a process which has been in the pipeline for several months, including the approval of the Federal Executive Council and a visit to the Asian country in February by a high-powered Federal Government delegation,” the statement said.
Explaining the rationale for prioritising the projects, Okonjo-Iweala said the projects are targeted at making a difference in the lives of Nigerians across socio-economic segments.
“President Goodluck Jonathan is keeping his promise to Nigerians through these important projects. The light rail in Abuja will improve transportation for all residents, especially the working class.
“The backbone will help to improve service delivery in areas like education and health while empowering the youths with better connectivity to the rest of the world.
“And the four new airport terminals, will like the others, create jobs and also ensure that Nigerian air passengers enjoy the services and convenience that their counterparts in other parts of the world take for granted,” she said.
The minister added that in line with the Federal Government’s policy on prudence with regard to loans, the facility was obtained under a highly favourable concessional term of 2.5 per cent interest over 20 years, with a grace period of seven years.
Giving further insight into the projects, Okonjo-Iweala explained that “the light rail project in the Federal Capital Territory, which has reached 25 per cent completion, will cost $500 million.
“When completed, the project is expected to significantly improve the lives of Nigerians, especially those in the lower socio-economic groups who have to travel long distances from their homes on the outskirts to their places of work or business in the city centre.
“One part of the intra-city rail network will extend from the city centre to Kubwa and the Nnamdi Azikiwe International Airport.
“The second will run from the city centre to Masaka in Nassarawa State. Both are high density, high traffic routes.
“The new airport terminals are also to help Nigeria achieve the status of a hub on the continent and deepen employment generation in the sector.
“The terminals will also help to grow passenger capacity to over 50 million from the current 20 million and increase the number of direct and indirect jobs in the sector to 1.5 million from the current 60,000.
“Apart from boosting the sophistication and effectiveness of the government’s efforts to tackle security challenges, the Galaxy Backbone ICT infrastructure will also improve connectivity to modern technology, especially for Nigerian youths.”