Senate yesterday approved a World Bank loan of $200million (N40billion) for Lagos State government for its development projects as requested by President Muhammadu Buhari.
The approval followed the last tranch of $600million by the World Bank in 2010 to be disbursed in three tranches of $200 million each.
The first and second tranches were approved by the National Assembly in the 2010 and 2012-2014 Borrowing Plans, respectively.
The approval was sequel to the consideration of the report of the Senate Ad-hoc Committee on Local and Foreign Debts, chaired by Senator Kabir Ibrahim Gaya (APC Kano South).
President Buhari had on September 29, sent a letter to the Senate requesting a special approval of Lagos State Development Policy Operation III (DPO III) under the Federal Government External Borrowing Plan (2015-2017).
Terms and conditions of the loan include: 25-years tenour, with five years grace period; 1.5 per cent interest rate as well as 0.75 percent service charge.
The DPO has four pillars of fiscal sustainability; budget planning and preparation; budget execution and investment climate.
Senator Gaya, while leading debate on the loan approval, urged that the Senate do consider the report of the committee fodder approval of Lagos Stats Development Policy Operation, DPO loan (budget support) of USD200million from the World Bank.
According to him, the third tranche facility has been captured in the 2015-2017 Medium Term Expenditure Framework, MTEF.
Senator Gaya said the key objective of the DPO facility from the World Bank is to support Lagos State to build systems and institutions to improve the quality of spending and strengthen investment climate while maintaining fiscal sustainability.
He listed projects visited by the Committee, which the first and second tranches were spent on to include: Ikoyi Link Cable Bridge; Cardiac and Renal Centres at Gbagada General Hospital, LASUTH; network of roads in Apapa (Marina Road, Apapa GRA, Gaskiya Collage Road/Isheri-Iganmu and Alaba and Orile-Iganmu Bust-stops); 27km light rail along the Lagos Badagry Expressway Corridor to Marina.
The committee chairman said the third tranche of the facility would be used to finance light rail project, education, roads, bridges, water and health sector amongst others.
He said this will enhance great economic growth, employment generation and increased revenue generation capacity of the state.
According to him, the credit facility will consolidate on the gains made in key sectors of the economy in the state from the first and second tranches.
He noted that the third tranche would be executed on projects like the Ultra-Modern Burns Centre, Cardiac and Renal Centre, Gbagada General Hospital; 27km light rail along Badagry Expressway Corridor to Marina as well as 70million gallon per day Adiyan water facility amongst others. In their separate contributions, Senators Danjuma Goje and George Sekibo expressed concern that state governors are mortgaging their states in the guise of credit facilities, insisting that loans should be repaid within the tenure of an incumbent government to check mate the trend.
According to Senator Goje, loans repayment should be made compulsory during the tenure of the governor that collected such credit facilities.
Ruling on the debate, the Senate President, Dr. Abubakar Bukola Saraki, called for judicious use of loans by the government, saying “loans request is not a bad thing, but the judicious use of such loans is the most import thing”.


Ad:See How you can turn $500 into $10,000 Click HERE For Details.
SHARE