The Federal Executive Council (FEC) Wednesday approved that the federal government should serve as a guarantor for the Bank of Industry (BoI) to obtain a 500 million Euros loan from a group of international lenders.This was disclosed by the Minister of State for Finance, Budget and National Planning, Mr Clement Agba, at the end of the weekly FEC meeting presided over by President Muhammadu Buhari at the State House in Abuja.
“Council today approved the issuance of a sovereign guarantee of 500 Million Euros to Credit seeds A. J London branch and a syndicate of international lenders as a collateral for 500 million Euros facility to the Bank of Industry.
“The loan is basically to fiancé major industrialisation projects and micro small enterprises value chains in Nigeria for up to five years tenure at affordable rates and these are single digit rates.
“The guarantor of the loan shall be the Federal Government of Nigeria and this is going to be executed through the Ministry of Finance Budget and National Planning,” he said.
The minister said the main objective of the loan is to support industrialisation, revitalise agriculture and facilitate the creation of new jobs.
“We do believe that about 1.2 million jobs would be created through this facility, increase the income of farming communities and promote the inclusion of MSMEs and small bordered producers in the industrial value chain as well as the deployment of transportation infrastructure that connect farming communities to processors and marketers,” he said.
He said the loan would be swapped to naira by the Central Bank of Nigeria to mitigate the foreign exchange risk.
Also speaking, the Minister of Power, Mr Saleh Mamman, said the council approved the release of $2 million as Nigeria’s contribution to the West African Power Pool.
“The Ministry of Power has presented this memo seeking for the ratification; the approval of the president to release 2 million dollars, that is, part of our contribution to the West African Power Pool and it has been graciously approved,” he said.