The Federal Executive Council on Wednesday approved an additional $200m loan from the International Development Association, an arm of the World Bank, in support of the Lagos State Development Policy Operation.

The Minister of Information and Culture, Alhaji Lai Mohammed and the Minister of Power, Works and Housing, Mr. Babatunde Fashola (SAN), briefed State House correspondents at the end of the meeting presided over by President Muhammadu Buhari.

Mohammed explained that the loan would enable the Lagos State Government to complete some if its ambitious projects, such as the 61km 10-lane expressway from Lagos to Badagry that would also include 27-kilometre light roads.


 
He said the facility would also enable the state government to rehabilitate the inner roads in Apapa in addition to some other major ongoing works.

Fashola explained that the facility was not a new loan but a segment of a programme of developmental initiatives which was approved in 2010 with a total sum of $600m for Lagos State.

He said the sum was meant to be disbursed in tranches of $200m each year starting from 2011 to 2013, regretting 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 agreements we had with the World Bank was a 40-year loan, a 10-year moratorium and 0.5 per cent interest.

“…so by the time this one was approved now because of the delays, we had 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 had gone up to 2.5 per cent, 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, 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 fast-track it so that the 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.”

The minister added that the fact the World Bank had the confidence to sub-national government was a testament of financial discipline, strong governmental structures and the establishment of institutions by the Lagos State government.

While saying that is the way to grow the economy, Fashola disclosed that Edo, Ekiti and Rivers states had also benefitted from similar gesture.

He explained that such loans were deducted at source at monthly FAAC meetings, therefore the risk of default would be minimal.

When asked why his state which also belongs to the ruling All Progressives Congress was the first beneficiary of such approval under the present government, Fashola said, “I mentioned partisan differences because I remember when the delays came up, I was told by the then Minister of Finance that she was getting complaints from the PDP governors that it was only the APC states that were benefitting at the time from the Word Bank loans.

“So we got access when we were in opposition because we qualified and we met the competitive conditions.

“One of the resolutions we have taken is that we must encourage other states who meet these kinds of conditions across the party lines to be able to access them, because it is competition that really brings productivity.”