THE Federal Executive Council has approved an additional $200 million loan from the International Development Association, an arm of the World Bank, in support of Lagos State Development Policy Operation.
Minister of Information and Culture, Alhaji Lai Mohammed, and Minister of Power, Works and Housing, Mr. Babatunde Fashola, informed State House correspondents of the approval at the end of the meeting presided over by President Muhammadu Buhari.
According to Mohammed, the loan would enable Lagos State Government complete some if its ambitious projects, such as the 61km 10-lane express way from Lagos to Badagry, which also includes some 27-kilometer light roads.
He added that the facility would also enable the state government rehabilitate inner roads in Apapa and some other major ongoing works.
Fashola explained that the facility is not a new loan but a segment of a programme of developmental initiatives, which was approved in 2010 with a total sum of $600 million for the state.
He explained that the sum was to be disbursed in tranches of $200 million each year starting from 2011 to 2013, but regretted that the arrangement suffered delays as a result of partisan political differences in the last dispensation.
He said: “After the first tranche was disbursed, there was a freeze on the second tranche. The initial agreement we had with the World Bank was a 40-year loan, a 10-year moratorium and 0.5 percent interest.
“But, because of the delays which subsequently characterised the partisan interference that took place, our profile as a nation also changed, we had become a bigger economy; though money was being lent to us, not now as a highly indebted nation anymore.
“So, by the time this one was approved now, because of the delays, we lost the opportunity of 40 years as it is now a loan of 25 years, the moratorium has reduced to five years instead of 10 years.
“The interest rate has gone up to 2.5 percent, but what is still heart-warming about it is that it helps to finance infrastructure.
“When we look at road construction and the value chain that people benefit from it, labourers, those who sell iron rods, artisans, craftsmen, that is really global economies are being reflated and infrastructure defines how big a nation can grow, it is the defining line between poor and rich nations.
“It is heartwarming that this administration has taken it on and again, fasttrack it so that Lagos State Government can continue its developmental programmes of infrastructure renewal, taking people out of poverty, reducing inequality because that’s the way to really distribute wealth in a society.”
Fashola added that the fact the World Bank had the confidence to sub-national government is a testament of financial discipline, strong governmental structures and the establishment of institutions.
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