The federal government has applied for $600 million (N93 billion) loan from the Islamic Development Bank (IDB).
The minister of state for finance, Alhaji Yerima Lawan Ngama, who disclosed this in Abuja yesterday, said Nigeria’s application for the facility has passed the IDB scrutiny and received positive approval from the Board.
According to the minister, disbursement of the facility will soon begin and it will be given out in tranches over a three-year period. The loan he said will be used to finance developmental projects in the country.
Addressing journalists during a meeting with delegates from the IDB the minister said the new loan application from the government will exclude the $370 million private sector loan already extended to the country by the IDB for other developmental project.
IDB’s investment under this private sector lending window in Nigeria is estimated at $370 million, which includes the $50 million food security fund for food production in three Nigerian States including Anambra; Gombe and Yobe.
A breakdown of the $370 million loan structure indicates that education got the largest amount $173 million or 47 per cent, health $74 million or 20 per cent while the agricultural sector got $85.1 million or 23 per cent. Another component of the $370 million loan will be spent on the financial industry for trade financing and on – lending fund for banks.
The meeting was convened to discuss how Nigeria would benefit from various windows of opportunity the bank is willing to open to the country.
With regards to the $600 million loan that Nigeria is expecting, the minister noted: "The facility is being intended for investment in social infrastructure and power like the provision of turbines for the Zungeru power station; the construction of health centres; urban and rural water works; housing and rehabilitation of some state universities.
"The facility will attract no interest and has a long repayment plan long enough for the recovery of the investment before repayment.’’
Nigeria became a member of the Islamic Development Bank in 2005 and of the bank’s $30 billion authorised share capital, Nigeria currently holds an of equity stake of $2.28 billion representing 7.6 per cent.