The Federal Executive Council (FEC) has approved the federal government’s plans to borrow a huge sum of 500 million euros.
The Minister of State for Budget and National Planning, Clemente Agba, made the revelation at the end of the FEC meeting, held on Wednesday in Abuja, which was presided over by President Muhammadu Buhari.
According to his analysis, the loan will be used to support industrialization, job creation and agriculture and should generate 1.2 million jobs.
Latest Nigeria News understands that the loan will be managed by Banco de Industria.
He said: “Council today approved the issuance of a Sovereign Guarantee of 500 million Euros from the Credit Suisse AG London Branch and a syndicate of international lenders as collateral for 500 million Euro facility to the Bank of Industry.
“The loan is basically to finance major industrialization projects and micro-small and medium enterprises value chains in Nigeria for up to five years tenor at affordable rates; these rates are single digit rates.
“The guarantor of the loan shall be the Federal Republic of Nigeria and this is going to be executed through the Ministry of Finance Budget and National Planning.
The Minister noted that in order to mitigate the foreign exchange risk, the Central Bank of Nigeria will swap the fund to Naira before it is made available to beneficiaries.
“We do believe that about 1.2 million jobs will be created through this facility; increase the income of farming communities and promote the inclusion of SMEs and small holder producers in the industrial value chain and the deployment of transportation infrastructure that connect farming communities to processors and market.
“The loan will be swapped to Naira by the CBN to mitigate the foreign exchange risk and the fund will therefore be available to Nigerian enterprises at a more affordable rate and in local currency.” he stated
Meanwhile, the Minister of Power, Saleh Mamman also disclosed that a memo seeking ratification and approval of the president to release 2 million dollars as part of contribution to the West African Power Pool was approved by the FEC.