By Mathew Dadiya, Abuja
The Federal Government Wednesday, approved the issuance of a Sovereign Guarantee of 500 million Euros from the Credit Suisse AG London Branch and a syndicate of international lenders as collateral for facility to the Bank of Industry.
The €500 million is equivalent of N200 billion given the present exchange rate.
500 million Euro Sovereign Guarantee loan be sourced for the Bank of Industry from external creditors.
The approval was given at the Federal Executive Council (FEC) presided over by President Muhammadu Buhari at the Presidential Villa, Abuja.
The Minister of State Budget and National Planning, Clement Agba, explained that the loan was meant to support industrialisation and agriculture, in addition to creating up to 1.2 million new jobs.
Agba explained that the facility would be repaid in five years and the Federal Government guaranteed the loan.
”Council today approved the issuance of a Sovereign Guarantee of 500 million Euros from the Credit Suisse AG London Branch and a syndicate of international lenders as collateral for 500m Euro facility to the Bank of Industry.
”The loan is basically to finance major industrialization projects and micro-small and medium enterprises value chains in Nigeria for up to five years of tenure at affordable rates; these rates are single-digit rates.
”The guarantor of the loan shall be the Federal Republic of Nigeria and this going to be executed through the Ministry of Finance Budget and National Planning, ” the minister explained.
According to him, the main objective of the loan was to support industry; revitalize agro-industrial processing zones, to facilitate the creation of new jobs.
The minister also said that the money would be disbursed to Small and Medium Scale Enterprises and would create about 1.2 million jobs in the country.
“We do believe that about 1.2 million jobs will be created through this facility; increase the income of farming communities and promote the inclusion of SMEs and small holder producers in the industrial value chain and the deployment of transportation infrastructure that connect farming communities to processors and market.”
He said that the loan will be swapped to Naira by the CBN to mitigate the foreign exchange risk and it will be available to Nigerian enterprises at a more affordable rate and in local currency.
Meanwhile, the Minister of Power, Saleh Maman also presented a memo, which was ratified and approved by the President to release $2 million as part contribution to the West African Power Pool.
The minister, however, did not give details on what impact the fund would have on the nation’s economy.