- Safiu Kehinde
President Bola Tinubu has again written to the Senate for the approval of a fresh $516 million loan from Germany’s Deutsche Bank.
Tinubu, in the letter addressed to the Senate President, Godswill Akpabio, and read before the lawmakers at Thursday’s plenary session, urged the red chamber to consider the loan request for approval.
According to the President, the proposed loan is to be used to finance the Sokoto–Badagry 1,000km Superhighway project, in line with the government’s approved borrowing plan.
Tinubu sought the approval of the loan in line with Sections 16 and 21 of the Debt Management Office (Establishment) Act, 2011, to enable the Federal Government to secure the financing for Sections 1, Phase 1A, and 1B of the project.
According to reports, the proposed 1,000-kilometre road will link Sokoto, Kebbi, Niger, Kwara, Oyo, Ogun, and Lagos states, connecting Illela to Badagry.
The financing arrangement for the loan is to be backed by a partial risk guarantee from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), while the Federal Government will provide counterpart funding of over N265 billion for land acquisition, compensation, and related infrastructure.
According to the president, the loan is structured for nine years, including a three-year grace period, with an interest rate pegged at the Chicago Mercantile Exchange SOFR plus 5.3 per cent per annum.
Prior to Tinubu’s letter to the Senate the financing plan for the loan was already approved by the Federal Executive Council.
Following the presentation of the request at plenary, Akpabio referred the matter to the Senate Committee on Local and Foreign Debts, directing it to report back within one week.
Akpabio, in defence of the loan request, reportedly said that it is better to borrow for projects to improve road safety and foster national integration.