The Federal Government is shopping for new loans to finance its Ibadan-Kano rail project which will cost about $11 billion.
The earlier impression was that China would provide the loans.
This was the assumption, especially since the China Civil Engineering Construction Corp (CCECC) has been contracted to construct the line, along with refurbishing the old Port Harcourt-Maiduguri narrow gauge.
But in Lagos at the flag-off of the Lagos-Ibadan segment of the Lagos-Kano line, President Buhari clearly hinted that his government is shopping for financing elsewhere.
Buhari said that the Federal Ministry of Transportation and Ministry of Finance have been directed to vigorously seek financial agreements with appropriate co-financiers to partner with the Federal Government for the development of the Ibadan – Kano railway.
In an interview, Transport minister Rotimi Amaechi disclosed that government is discussing with the London-based Standard Chartered Bank Plc.
Unlike Buhari, he said government is shopping for funds for two rail line projects expected to cost about $14.4 billion.
Included is the Port Harcourt-Maiduguri narrow gauge line, which has been awarded to CCECC at a cost of $3billion.
“We’ve moved away from China in some of our projects. Finance Minister Zainab Ahmed is overseeing the talks with the emerging markets-focused financial institution about arranging the infrastructure loans,’’ Amaechi said.
In March, Amaechi disclosed that Nigeria borrowed about $2.5billion from China-Exim Bank for the Lagos-Ibadan rail
For these Rail projects and others, Nigeria should seek loans from internal sources (from either retail or institutional investors) before external sources. This way, the interests paid can be reinvested into the economy for national development. Most internal bonds raised by Nigeria have been oversubscribed. We should maximize our internal potential first.