After a long deliberation by the Nigerian government whether or not it should accept a World Bank Loan offer, the Finance minister of Nigeria has closed a deal to borrow the sum of $780 million.
The loan agreement was signed in Abuja by the Finance Minister, Dr. Shamsuddeen Usman, for the Federal Government and the Country Director of the World Bank, Mr. Onno Ruhl, on behalf of the Bretton Woods institution.
It was stated that money would be used solely for the Third National Fadama Development Project (NFDP- III), Federal Road Development Project (FRDP) as well as Community and Social Development Project (CSDP).
The loan is also expected to contribute to the Federal Government’s efforts in tackling food scarcity, poverty reduction in the rural areas and transport, which, according to the Finance minister, were key areas of the current administration’s Seven-Point Agenda.
Total World Bank loans
It has been reported that the $780 million loan brings the World Bank’s total loan portfolio to aid projects in Nigeria since 1999 to a staggering sum of $3.3 billion.
Following a long debate over borrowing from the World bank again, with many factions of the policy makers showing skepticism, the Finance minister moved to assure everyone that this was a necessary step for a greater cause.
He said there was nothing wrong in obtaining the loan, adding that it was the utilization of the loan that mattered. ‘There is nothing wrong with borrowing. If you use it well, you benefit … 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,’ the Finance minister said.
The Finance minister also corrected the misinformation of the World Bank’s aid to Nigeria which he said was a total loan portfolio of $750 million and not the reported $3.3 Billion. He said in 2009 fiscal year, the World Bank’s allocation for the country would increase to $1.1 billion.