The Federal Government has said the $5.5 billion it is requesting the Senate to approve for it may take Nigeria between five years and 30 years to repay.
This was as the Senate in turn told the Federal Government that there was the need for it to borrow responsibly.
These were the highlights of a session the representatives of the executive arm of government had with a Senate committee on the desirability of the loan, with the government saying it would have to borrow more to complete a number of ongoing infrastructural projects.
The position of the executive was stated by the Minister of Finance, Kemi Adeosun, who was represented by the Director-General of the Debt Management Office, Patience Oniha, at a defence session organised by the Senate Committee on Local and Foreign Debts in Abuja on Thursday.
Adeosun said Nigerians needed to focus on the long-term benefits of the loans for which President Muhammadu Buhari had written to the Senate and the House of Representatives.
Oniha said at the Senate session: “In terms of tenor, from the figures that distinguished senators have reeled out, we have them in various tenors.
“What you do is at the time you get to the market and you want to price, you will be more certain about the price.
“It could be anywhere from five to 30 years.
“On borrowing, when the current generation may not be around at that time (payment completion), the truth is that if we are borrowing in the long term, we are using it to finance capital projects, which are also long-term (projects) and the benefits of those projects are also long-term (benefits).
“I believe that some of the roads and even institutions like some universities that we see today were built before some of us were born.
“We should look at it this way that the benefits are also long-term.”
Speaking also, the Minister of Transportation, Rotimi Amaechi, said Nigeria would borrow more to finance ongoing rail projects.
According to Amaechi, the country needs $36 billion to complete the projects.
He said: “What is in this (2017) budget that we are asking for now is Kano-Kaduna and Port Harcourt-Calabar, but the bank that is lending us money will prefer if we ask for Ibadan-Kano so that we can finish the whole stretch from Lagos to Kano.”
When asked which particular rail projects the loan would be used to finance, Amaechi said: “It depends on what they do with the virement; it will affect a lot of the funding.
“This money we are asking for will fund the completion of the Itakpe-Warri line.
“hat will be ready in June next year.
“It will also fund the Kano-Kaduna and Port-Harcourt-Calabar (rail lines).
“It means that we will still come back to ask for more funding for the Ibadan-Kaduna rail, even if we got this (the current request).
But the Chairman, Senate Committee on Local and Foreign Debts, Senator Shehu Sani, says if Nigeria must borrow, it must borrow responsibly.
Sani said: “The committee has the mandate to examine the merits and otherwise of the current loan request of $5.5 billion of the President.
“If we must bequeath to the future generation a pile of debt, it must be justified with commensurate infrastructural proof of the value of the debt.
“The payment plan of this debt will undoubtedly last the length of our lifetimes and possibly beyond.
“We must leave behind a legacy that will appease and answer the questions the next generation of Nigerians will ask.”
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