Home / Banking/Investments / S/East Senators move to stop Buhari’s $6bn loan request for rail over zone’s exclusion
Nigerian Senate

S/East Senators move to stop Buhari’s $6bn loan request for rail over zone’s exclusion

…Proposes inclusion of Aba-Onitsha Railway as solution

Indications emerged at the floor of the Nigerian Senate on Tuesday that the $6bn loan request brought forward by President Muhammadu Buhari for the funding of three new railway projects may suffer rejection after all. The new schemes include Lagos-Ibadan, Lagos-Calabar Coastal Railway and Kano-Kaduna Railway.

The reason behind the rejection was found from the glaring fact that none of the new rail systems is sited in the South East of the country, but they will be part of states that will pay back the loan. Before now, South East leaders of thought had presented Aba-Onitsha rail scheme as the best rail scheme that will drive further economic development in the zone hence what was considered by the federal government before embarking on the three new schemes was growing of economic and commercial cities.

Buhari SE Senators

South East Senators paid president Buhari courtesy visit recently. They are seeking equity in railway projects so that when the loan will be paid back, the zone can be happy paying like other zones.

Leading the argument was Senator Enyinnaya Abaribe who pointed out that South East corridor is not covered in the new railway schemes, saying it will amount to the height of exclusion in a federation that new railway schemes are going on virtually in all the zones except the South East.

Efforts made by Senator Gbenga Ashafa to paint Abaribe’s argument the colours of sentiments failed, as other South East Senators and the entire Red Chambers were able to observe what Senator Abaribe pointed out, thus forcing the lawmakers to suspend discussions on the request.

On April 28, Business Hilights had reported that the entire South East will become heist losers if National Assembly approves Buhari’s $6.4 billion China and World Bank loans

Analysts had started giving analogy of how the South Eastern states will become worst losers by joining in paying for a loan that did not add any value to their lives if the presidency finally secures National Assembly approval to take about $6.4 billion dollar loans from the World Bank and China to fund railway infrastructure.

This is so because all the railway projects that will be funded by the loan are far from the zone, but the repayment will come from federal allocation basket which is meant for all sates.

Observers say if deductions are made for the repayment of the loan, it will affect monthly sharing of allocation as all the states including the South East which did not gain from the loan will join in paying back the loan even though it did not gain from it.

Business Hilights recalls that all the railways meant for the loan has no link with the South East who had made several appeals to the government to join the Onitsha-Aba railway in the emerging new railway revolution sweeping in the north, south west and south south regions of the country.

Part of the loan will go for the Lagos-Calabar coastal rail line, the Kano-Kaduna rail line, and the Lagos-Ibadan rail line and nothing for the south east.

Details of the loan showed that whereas about $5.851 billion which is more than 90 per cent will go for the listed railway development, the difference of $549 million will be used for health matters.

President Buhari is asking the lawmakers for quick approval to enable Nigeria access the China-Africa fund package already included in 2016-2018 external borrowing plan which was forwarded to the National Assembly last August. The Senate had rejected the borrowing plan entirely in November last year.

Ohaneze ASPMDA

L-r: President of Auto Spare Parts & Machinery Dealers Association (ASPMDA) and host, Chief Daniel Offorkansi, chairman of trade fair stakeholders forum, Chief Jude Ringo Okeke, visiting Ohaneze president, Chief Barr. John Nnia Nwodo and other Exco members during a recent courtesy visit in Lagos recently.
The Ohaneze had severally proposed Aba-Onitsha Railway scheme to the federal government but nothing was done.

The President’s letter reads: “I wish to refer to my earlier letter with respect to the above subject and to inform the distinguished senate that the China Exim bank has approved our request for a loan to execute the Lagos-Kano railway modernisation project, Lagos-Ibadan segment for a sum of $1.231 billion.

“The China government has also informed us that the approval of the Lagos-Kano railway modernisation project, Kano-Kaduna segment and coastal railway project, the Lagos-Calabar segment are imminent.

“China Exim supported projects; Lagos-Kano modernisation projects, Lagos-Ibadan segment $1.231 billion; Lagos-Kano railway modernisation project, Kano-Kaduna segment $1.146 billion and coastal railway project, the Lagos-Calabar segment 3.474 billion, making a total of 5.851 billion.

“As you are aware the funds available under the China-African fund are limited and loan applications from all over Africa countries are funded based on first come, first serve and therefore there is an urgent need to sign these loans as soon as they are approved or we may lose out in the event that we delayed in signing the loan agreement.

“These loans form part of the overall money for the rail strategy. We are in the process of completing the concession of the Port Harcourt Maiduguri line to immediately link the eastern part of the nation.

“We fully intend to source further concessioning funding to ultimately upgrade this critical line to high speed standard gauge. These projects form the overall plan to resuscitate the rail transport across the nation and thereby drive inclusive growth.”

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Business Hilights is an online news channel conceptualized and structured to report and track on a daily basis; latest developments in critical business sectors to serve as a one stop news gateway for governments, foreign and indigenous investors.

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