The Minister of Power, Works and Housing, Babatunde Fashola, and Transportation Minister, Rotimi Amaechi, disclosed the need for Nigeria government to take the proposed $5.5bn foreign loan.
As stated by them, Nigeria will benefit immensely if it takes the loan request to build new rail lines and finance capital projects.
Addressing the Senate Committee on Local and Foreign Debts yesterday, Amaechi said the fund will be used in completing the Itape-Warri rail line and to begin the Kano to Kaduna and Port-Harcourt to Calabar rail lines.
The Senate Committee had invited the minister and some members of the executive to explain how Nigeria can pay back the proposed loans from proceeds from the projects they would be expended on.
The Minister said this while explaining the economic viability of the proposed rail projects, said Nigeria may not experience development until it grows its rail system.
“I will like to quote someone in a conference I attended two days ago,” he added.
He stated that if any of these doesn’t exist, there can’t be development. I’m sure that’s why we are having problems in the growth of the Nigeria economy.
“After the completion of these rail lines and when we have new locomotives, it’s going to contribute tremendously to the growth of the economy. Imagine the impact on agriculture alone. Imagine the deflation, drop in price that will happen if agricultural products are conveyed seamlessly to the market.
“We can get return on the funding in long term through freight because the money is in freight and not the passengers. We have over 30 million tonnes of goods that is tried down between Lagos and Kano alone. If you check our seaports, goods are tied down because of Apapa road.
“What we plan between now and December is to ensure that we truck it with the narrow guage to Ebute Meta for those who want to distribute around Lagos and they can also take it from there by road while we continue by rail to Kano and other parts of Nigeria,” he said.
On his part, Fashola in a statement yesterday by the Director of Press in his ministry, Olusegun Ogunkayode, emphasised the need to source for loans to finance the development of critical infrastructure as a fulfillment of the campaign promises of the federal government.
The Senate Committee chaired by Shehu Sani, will submit a report to guide the Senate in considering the loan request.