The Federal Executive Council (FEC) has approved plans by the federal government of Nigeria to borrow a whopping sum of 500 million Euros.
The Minister of State for Budget and National Planning, Clement Agba made the disclosure at the end of the FEC meeting on Wednesday in Abuja which was presided over by President Muhammadu Buhari.
According to his analysis, the loan will be used to support industrialization, job creation, and agriculture and is expected to create 1.2 million jobs.
We understands the loan is to be managed by the Bank of Industry.
He said: “Council today approved the issuance of a Sovereign Guarantee of 500 million Euros from the Credit Suisse AG London Branch and a syndicate of international lenders as collateral for 500 million Euro facility to the Bank of Industry.
“The loan is basically to finance major industrialization projects and micro-small and medium enterprises value chains in Nigeria for up to five years tenor at affordable rates; these rates are single digit rates.
“The guarantor of the loan shall be the Federal Republic of Nigeria and this is going to be executed through the Ministry of Finance Budget and National Planning.
The Minister noted that in order to mitigate the foreign exchange risk, the Central Bank of Nigeria will swap the fund to Naira before it is made available to beneficiaries.
“We do believe that about 1.2 million jobs will be created through this facility; increase the income of farming communities and promote the inclusion of SMEs and small holder producers in the industrial value chain and the deployment of transportation infrastructure that connect farming communities to processors and market.
“The loan will be swapped to Naira by the CBN to mitigate the foreign exchange risk and the fund will therefore be available to Nigerian enterprises at a more affordable rate and in local currency.” he stated.
Meanwhile, the Minister of Power, Saleh Mamman also disclosed that a memo seeking ratification and approval of the president to release 2 million dollars as part of contribution to the West African Power Pool was approved by the FEC.