Osinbajo seeks Reps approval for additional $1.2bn external loan

Acting President Yemi Osinbajo is seeking the approval of the House of Representatives for $1.280 billion loan for the Development Bank of Nigeria (DBN).

He said the DBN is ready to commence operation while the four foreign banks involved will commence the disbursement of the loan.

The acting President is also seeking the approval of €9m for agricultural financing to consolidate the gains of the first tranche of €10.5m.

He sent the requests as addendum to the 2016-2018 external borrowing plans.

Osinbajo, whose letter dated May 16, 2017 was conveyed to Speaker Yakubu Dogara in the Vice President’s seal and letterhead but signed with the designation of the Acting President, said the DBN was approved by the last administration but the loan facility was strangely omitted in the 2014/2016 borrowing plan by the National Assembly.

The letter reads “The Development Bank of Nigeria (DBN) is a multi-donor supported bank approved under the previous administration with the Financing Agreement executed on February 25, 2015.

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“However, the facility in the sum of $1.28b appeared to be inadvertently omitted in the 2014/2016 external borrowing plan approved by the National Assembly.

“The bank is being supported by the World Bank, African Development Bank, KfW Development Germany and French Development Agency in the sum of $500m, $450m, $200m and $130m respectively.

“The bank is ready to commence operation and the donors are also ready to commence disbursement consequent upon National Assembly approval of the borrowing.

“Furthermore, Fund for Agricultural Finance in Nigeria (FAFIN-11) is being supported by KfW Development Bank of Germany in the sum of €9m.

“The first phase of (FAFIN-1) was €10.5m and the Financing Agreement was executed on October 3, 2013.

“The first tranche of FAFIN-1 has been fully disbursed and the donor is ready to provide another tranche of €9m for FAFIN-11. The second tranche is for the consolidation of the gains in the investment of the first tranche.”