Senate approves $200m World Bank loan for Lagos

The Senate on Wednesday, approved the request of President Muhammadu Buhari for $200 million World Bank loan for Lagos state’s Development Policy Operation.
The approval followed the recommendation of the senate’s Committee on Local and Foreign Debt.
Chairman of the committee, Senator Kabiru Gaya (APC Kano South), while presenting the report, said that the state had met the requirements for the loan.
He added that the key objective of the loan was to support benefiting states to build infrastructure and improve investment climate.
According to Gaya, the loan is the third tranche of a development policy operation of the world’s apex bank, which was released in three tranches.
He said that the committee visited projects funded with the first and second tranches of the loan and was satisfied with the way the fund was utilised for the purpose intended.
He explained that the loan was released in tranches to ensure accountability.
Gaya disclosed that some of the projects funded by the loan were Lekki-Ikoyi Link Cable Bridge, Cardiac and Renal Centres in Lagos State University Teaching Hospital and network of roads in Apapa.
Others, he said, were the 27-kilometre Light Rail along Lagos-Badagry Expressway, Corridor to Marina with world class rail stations and dualisation of Lagos-Badagry roads with toll plazas.
However, some senators who contributed to the issue expressed worry at the rate of borrowing by governments in the country, saying that Nigeria might return to her days of indebtedness, if not checked.
Sen. Danjuma Goje (APC Gombe Central) called for caution on loans so that Nigeria would not return to the days of indebtedness.
He stressed the need for the nation to scrutinize every loan before approval or acceptance, and advised governors to take loans that they could pay back within their tenure.
In his contribution, Sen. George Sekibo (PDP Rivers East), urged the senate that after approving the loans, it should carry out oversight function to ensure utilisation of such loans.
He said that the senate had to ascertain by itself that such loans were being utilised on projects for which they were approved for.
In his remarks, Senate President, Dr. Bukola Saraki, stressed that the era of indebtedness was due to non-utilisation of loans for the purposes intended.
He said that the senate would only approve loans for states that had the capability of paying back, adding that the days of indebtedness were over.
The loan’s first tranche of 200 million dollars was approved in 2010 and the second in 2012-2014 borrowing plan.
Lagos state and Edo are the only states in Nigeria and only beneficiaries in Africa of the Development Policy Operation loan.
The loan is for 25 years with a five-year grace period at an interest rate of 1.5 per cent and service charge of 0.75 per cent.