Work may soon begin on the revitalisation of the Eastern Rail Corridor as the Senate yesterday okayed a $21billion foreign loan requested by President Bola Ahmed Tinubu.
A major component of the loan is $3billion earmarked for the rail corridor, which stretches from Port Harcourt, Rivers State to Maiduguri, the Borno State capital.
Victor Umeh, a Labour Party(LP) senator representing Anambra Central, described the approval of the sum as a milestone.
“This is the first time I have seen $3bn allocated to rebuild the Eastern rail line. That alone justifies my full support,” Umeh enthused.
The approved $21 billion covers the Federal Government’s external borrowing plan for 2025 – 2026. It includes $21.19billion in direct foreign loans, €4 billion, ¥15billion, a $65million grant and domestic borrowing through government bonds.
Also in the package is a provision to raise to $2 billion through a foreign-currency-denominated instrument in the domestic market.
Other key sectors targeted in the loan plan are infrastructure, agriculture, security, power, housing, and digital connectivity.
The approval of the loan followed the presentation and adoption of the report of the Senate Committee on Local and Foreign Debt.
The report was titled: “Report of the Committee on Local and Foreign Debts: That the Senate do receive and consider the report of the Committee on Local and Foreign Debts on the following: 2025 – 2026 External Borrowing (Rolling) Plan; Issuance of FGN Bonds to settle outstanding pension liabilities under the contributory pension scheme; and Establishment of Foreign Currency Denominated Issuance Programme in the domestic debt market.”
It was presented by the committee’s Chairman, Senator Aliyu Wamakko.
Wamakko said the request for approval of the loan was first transmitted to the National Assembly on May 27, but that it was delayed due to recess by the lawmakers and documentation issues in the Debt Management Office(DMO).
Chairman of the Senate Committee on Appropriations Solomon Adeola said most of the loan requests had already been factored into the Medium-Term Expenditure Framework and the 2025 budget.
“The borrowing is already embedded in the 2025 Appropriation Act. With this approval, we now have all revenue sources, including loans, in place to fully fund the budget,” Adeola said.
Senator Mohammed Musa noted that the loan disbursement would span six years, not just 2025.
He explained that the loan request was in tandem with global economic practices.
“There’s no economy that grows without borrowing. What we are doing is in line with global best practices,” Musa said.
Also, Senate Committee on Banking, Insurance and Other Financial Institutions Chairman Tokunbo Abiru explained that the loans are concessional and adhere to the Fiscal Responsibility Act and Debt Management Act.
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