The Federal Executive Council (FEC) on Wednesday approved a $1.3 billion loan for the takeoff of the Development Bank of Nigeria (DBN).
This was disclosed by the Minister of Finance, Mrs Kemi Adeosun, while addressing State House correspondents at the end of the weekly FEC meeting in Abuja.
The minister said the loan has a repayment period of 20 to 21 years and would allow the DBN to takeoff fully.
She said the $1.3 billion loan would make it possible for the DBN to lend to Small and Medium Enterprises (SMEs) for a longer period because of their capacity to employ more than some big corporations.
“Council gave the approval for credit facilities totaling $1.3 billion to support the Development Bank of Nigeria. As you know the Development Bank of Nigeria recently received its license and is been funded by some long term loans from some of our development partners.
“So, the World Bank had given us $500 million repayable over 21 years and all of this is at a concessional rate. The African Development Bank is giving us $450 million and KfW Development Bank is giving us $200 million and the French Development Agency is giving us $130 million,” she said
She said the legal opinion of the Attorney General of the Federation and the approval by the National Assembly were the two main requirements needed to access the money.
“Before it goes to the National Assembly, it needs to be approved by FEC. And the FEC simply approved today that these loan requests should go to the National Assembly for approval so we can access this money and the Development Bank of Nigeria can take off fully as it is expected to transform financing to our MSME sector.
On the country’s rising debt profile, Adeosun said Nigeria was still within its limits with a debt to GDP ratio of 13 per cent when compared to other African countries, stressing that loan would generate growth in the economy, which would make it possible for government to generate additional taxes.
“These are concessional loans with interest of two percent in some cases for 21 years. You can’t get that kind of money anywhere in the world and it is going directly to the people that need it,” she said.
The minister also told journalists that the council has approved the procurement of project managers and verification consultants to bring the 200,000 military officers into the Integrated Payroll and Personnel Information System (IPPIS) platform.
She said approval was given for three contracts amounting to N550 million.
“We are hoping to bring in all the military by Third Quarter of 2017. We have assurances about the savings that we will typically generate when we bring agencies on IPSS. Generally, when we bring agencies into IPSS, the payroll goes down.
Effort to sanitise our payroll and make sure that the money we are spending on salaries is very accurate. So, bringing the military on boards is a big step in that area,” she said.
