By Stephen Ubanna
More facts have emerged how Hajia Zainab Ahmed, minister of Finance, Budget and National Planning successfully negotiated a $3 billion loan from the World Bank at the Bank just concluded meeting in the United States. This is because the country has the population strength and the market to sell manufactured goods . This is in addition to being an Oil producing nation and a member country of the Oil Cartel, Oil Exporting Countries, OPEC,which guarantees it a source of servicing the loan.
The $3 billion loan, according to a source at the Debt Management Office, DMO, would bring the country’s total debt owed the Bank to about $11.67 including the accrued interests over the years, thus increasing the country’s debt burden, which Hajia Ahmed reportedly said is still manageable.
Prior to the successful negotiation of the loan, the country’s loans from the International Bank for Reconstruction and Development , IBRD, which is another arm of the Bretons Woods Institution , was $124.18 million . The Value News source at the DMO, described the IBRD, is the Commercial arm of the World Bank while the International Development Association, IDA, is the Concessional arm through which the bank grants low interests loans to the developing countries.
Recall that Albert Zeufact, the Bank Chief Economist had alluded to the fact that the major problem of the African countries debt including Nigeria was not the Concessional loans from the Bank but the Commercial loans, which the countries in the Continent had gone ahead to secure with foreign exchange, global financial condition and Commodity price risks. It is not surprising why the World Bank is country’s single largest Creditor as it was said to hold over 35% of the country’s external debt Commitment.
In approving the loan which was said to be at a Commercial interest rate, the Bank officials were said to have insisted that it must be used for the project earmarked for it which is the reforming of the nation’s power sector and thus, must not diverted to any other sector of the economy.
That much was confirmed by the minister. She had disclosed to Nigerians that the loan would be used to cover the funding gap and the current tariff which the investors in the power sector had persistently cried out that it was the very low compared to electricity tariff Consumers pay in other parts of the world
The Distribution Companies were said to have made it clear to the government at the various levels of discussion championed by the Nigerian Electrictricity Regulation Commission, NERC, that that the current tariff charged consumers was ‘’not cost effective’’ and therefore should be given the nod to introduce Commercial charges. This was said to have been turned down by NERC, which has a mandate to fix electricity charges in the country.
Note, that the NERC, had increased the country’s electricity charges for both domestic and Industrial usrs , which many Companies did not funny. The investors major worries, according to sources, was the huge debts owed them by ministries, Departments and Agencies, MDAs, including the National Assembly and military bases across the country which run into billions of naira.
Hajia Ahmed may have gladdened the heart of the power investors when she revealed that part of the $3 billion World Bank loan would be used to cover the losses incurred in their investment and electricity charges.
In spite of the fact that the minister has alreadt wet the appetites of the International power investors, which had earlier threatened to pull out of the business if the government did not take their demand for increased tariff serious, she may have dampened their enthusiasm when she said the loan would be disbursed in tranches of $750 million from April 2020. The investors had expected the Bretton Woods Institution, to start disbursing the loan this year to facilitate the transformation of the nation’s power sector in order to improve supplies to consumers.
At present , the Independent Power Producers , IPP, which took over the control and Management of the country’s assets in the power sector are generating a little above 4,000 megawatts against a set target of 7,000.Many believe that with the $3 billion World Bank loan, if properly utilised, it would go a long way to enhance the current epileptic power supply and boost Industrial production in the country
Note that many Industries, particularly, the Small and Medium Scales, SMEs, had folded up because of high cost of running their generators with diesel while some had relocated to Ghana and Cote d’Ivoire, where electricity are said to be relatively stable to manufacture for the Nigerian market. Although, the Companies may have been experiencing problem in the recent time to sell their manufactured products in the country because of the border closure by President Muhammadu Buhari to force the neighbouring countries of Republic of Benin, Niger, Tchad and the Central African country of Cameroon to join Nigeria in the anti-smuggling war over the use of their countries as bases to smuggle prohibited food items, particular, foreign parboiled rice, including small arms and weapons into the country.
Given the difficulty which many of the approved Companies in the member countries of the regional economic economic bloc Economic Community of West African States, ECOWAS, are currently facing due to the border closure by Nigeria, there are indications that some of the Companiers which relocated to Ghana and other African countries to manufacture for the Nigerian market may take advantage of the planned $3 billion World Bank loan to improve the power sector re-locate to Nigeria, which has the population and the market compared to other African countries. to avoid a future occurrence of what they are currently experiencing across the nation’s borders, particular, at Seme /Krake Joint Border, where hundreds of their truck laden cargoes worth billions of naira had been trapped over the last two months.
Indeed, the border drills , comprising of the Customs, Nigerian Immigration Service, NIS the, Nigerian Police Force, NPF, Directorate of State Security and the Department of Military Intelligence, DMI, were said to have tightened up security at the borders with these neghbouring countries across the country to ensure that no imports including ETLS , goods enter into the country or export of ETLS goods exit the country to Compliment the effort of the Border Commands patrol teams
From the onset, Muhammed Uba Garba, the Seme Command , Area Comptroller , had known that , that the Seme /Krake Joint Border is a busy trading route, that he had mounted strategic border patrols, that it was pretty difficult for smugglers to operate in the area. Those who had attempted to use the Owode axis and the Creeks fund around the Badagry and Badagry West local government Areas would never forget their experience in a hurry as they have lost both their goods and their money including vehicles to government .
Many believe that Border Brill security Operatives may not have heard much to do compare their activities in the border Areas in Ogun, Oyo and Osun states. This is most of the foreign rice smugglers, who are the target of the government had been forced to relocate to these other states where they are f facing fire from the Border drill security Operatives and the Federal Operations Unit , FOU, Zone A, Ikeja, under the close watch of Mohammed Aliyu, the Area Comptroller.
