The development will further raise the nation’s debt profile. | By Iferi Etuk
The federal government announced on Thursday it will be securing a fresh USD 500 million loan for an erosion control project, lifting the nation?s foreign debt further amidst calls the growing foreign credit profile be curbed.
The World Bank facility will be applied to the Nigeria Erosion and Watershed Management Project (NEWMAP), the National Economic Council said.
The medium-term soft loan will be interest-free and will come with a 40 years repayment duration and 10 year moratorium, Anambra State Governor, Peter Obi, said, after the council meeting on Thursday.
Nigeria?s debt profile stood at $5.7 billion as at December 2011, according to The Debt Management Office. A fresh $8 billion, to be spread across four years, is being negotiated from Chinese banks, bringing the figure to $14 billion.
Lawmakers have criticised the growing profile which the government says will fund developmental projects like constructions of railways.
Minister of Information, Labaran Maku, said on Monday the debt status presented no threat to the economy.
Obi, the Minister of Finance, Ngozi Okonjo-Iweala, and that of the Environment, Hadiza Mailafia, made a joint presentation to the council on the loan facility and the project.
?The loan is meant to check gully erosion in the South East and other parts of the country which is increasingly threatening lives and livelihoods of millions of Nigerians,?? said Obi.
Obi said the council had directed the Ministry of Finance and the Governors Forum to hold discussions on other loans to facilitate states? access to checking soil erosion and promoting agriculture and infrastructural development.