September 11, 2012 / Federal Minister of Finance Release
*$1.1 Billion Facility obtained From China Exim Bank to speed up 3 projects including Galaxy Backbone
To realise President Goodluck Jonathan’s pledge to boost critical infrastructure in the country, the Federal Government signed an agreement for a $600 million facility with the China Exim Bank for two high priority, high impact projects expected to be completed by 2015.
The two projects are the Abuja Light Rail project which will cost $500 million and the Galaxy Backbone ICT infrastructure which will be financed with $100 million.
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 on for several months and has included the approval of the Federal Executive Council and a visit to the Asian country in February by high powered Federal Government delegation.
The loan agreement was signed on behalf of Nigeria by the Coordinating Minister of Economy Ngozi Okonjo-Iweala and Mr SunPing, managing director, for China Exim Bank. The Ministers of Aviation, Princess Stella Oduah, FCT Bala Mohammed, Minister of State Works, Ambassador Yuguda were in the team which worked on the final details of the agreement with the officials of the bank.
Also present were DG, Debt Management Office, Dr Abraham Nwankwo and Special Adviser to the President on Performance Monitoring, Professor Sylvester Monye.
Explaining the rationale for prioritising the projects, Dr Okonjo-Iweala said that 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.”
In line with the Federal Government’s policy of prudence with regard to loans, the facility was obtained on highly favourable concessional terms: 2.5 per cent interest over 20 years with a grace period of seven years.
The light rail project in the Federal Capital Territory which is at 25% completion will cost $500m. When completed, the project will significantly improve the lives of Nigerians especially those in the lower socio-economic groups who have to travel great distances from their homes on the outskirts to their places of work in the city.
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 will 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.
The Galaxy Backbone will apart from boosting the sophistication and effectiveness of the government’s efforts to tackle security challenges also improve connectivity to modern technology, especially for Nigerian youths.
Paul C Nwabuikwu
Senior Special Assistant to the Coordinating Minister for the Economy and Minister of Finance