Newsexpress place banner advert Yudala genuine products
DMO clears the air on proposed $29.9bn foreign loan

By News Express on 01/11/2016

Share on facebook Yahoo mail icon Gmail icon

Views: 487


Director General of the Debt Management Office (DMO), Dr. Abraham Nwankwo, on Tuesday provided clarifications on the proposed $29.9 billion foreign loan request submitted to the National Assembly by President Muhammadu Buhari last week.

The DG, while speaking on a Channels TV live programme, Sunrise Daily, explained that the loan, which covers a period of three years, would help in addressing the biting infrastructure deficit in the country.

He stated: “When you are in this kind of economic situation, you have to decide where you want to start addressing the problem. You then come to the conclusion that the most critical point to start is to deal with infrastructure problem. If you deal with infrastructure problem, the cost of power will be lower, the cost of transportation will be lower, and the cost of most other services will be lower.”

According to Nwankwo, one of the features of the proposed loan is the low concessionary nature of the interest rate, which is fixed at 1.5 per cent. This arrangement differs from previous loan arrangements (under previous administrations) with the Paris Club of creditors, which came with floating interest rates as high as 18 per cent.

He also explained that the facility will help revive infrastructure like railways which will smoothen movement of heavy goods across the country.

He believed tackling infrastructure deficit would force down costs of goods and services on the long run, explaining that the development will have a significant impact on the price level in the economy. “That impacts the economy by bringing down the general price level, (they call it the consumer price index, which is a classical measure of the price level and the rate of inflation.) When you do this, the Central Bank of Nigeria will set the monetary policy rate low, because all over the world, the central bank knows it has to put the monetary policy rate high enough to catch up with inflation rate, otherwise we will be talking of negative real rate of interest which destroys the economy. So the way to go about it is that you have adequate infrastructure, power road, transportation ICT. All these make the cost of production in the economy much lower and when this happens, the cost of goods and services will be lower and then inflation will start coming down. And if inflation comes down, the monetary policy rate will be lower and this will translate to a lower lending rate. That is the sequence,” Nwankwo explained.

The DG stated that the $30 billion is actually for a three year-period and that it will run from 2016-2018 to be repaid in 20 to30 years’ time. He said, with this arrangement, it will not be difficult for the country to repay. According to him the DMO had advised the Federal Government that Nigeria can as from 2017 acquire loans to the tune of $22 billion and that $30 billion (for three years) is lower than what it advised the Federal Government to get.

Speaking on how the $30 billion will be spent, Nwankwo stated that the sum of $10 billion will be spent per annum for three years and will be targeted at building infrastructure in all states of the federation and the main focus will be on power generation, rail and road renovation and construction.

News Express reports that the Senate discussed the loan request at its plenary today but refused to approve it – a decision which reflects popular opinion as the request has received widespread condemnation across the country.

•Photo shows DMO DG, Dr. Abraham Nwankwo.

Source News Express

Posted 01/11/2016 2:34:40 PM

 

Share on facebook Yahoo mail icon Gmail icon


 

CLASSIFIED ADS

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

 

You may also like...
Airtel scores another first, introduces single recharge card...

Obiano presents 18-seater bus to Anambra Correspondents’ Chapel...

UNICEF seeks $3.3bn in emergency assistance for 48...

Lagos signs historic Smart City deal with Dubai...

OPEC cuts 2016 oil demand growth forecast

PDP hails court verdict over suspended Bayelsa chairman...

Nigerian Air Force to start oxygen production

Women block East-West Road to protest alleged sale...

How to practically love people (Part 3)

El-Rufai vows to prosecute sponsors of electoral violence...

Nigerian soldiers hide as Boko Haram attack churches...

Ogbemudia lives on through his works — Okowa...

 

Latest News Recalling Dino Melaye from the Senate not an easy task – Senior INEC official Teenage UNIBEN student wins N10m in talent hunt Corps member robbed and killed in Yenagoa Kaduna sacks 124 Traffic Marshals Probe sources of weapons used by killer herdsmen — Sultan Fire guts Abuja mega church El-Rufai preaches unity at Sallah, urges Nigerians to jointly resist agents of doom Na’Allah highlights stewardship, felicitates with people of Kebbi, Nigeria on peaceful Eid-el-Fitr 123 die in tanker fire disaster FG eyes $1 billion tax windfall My role in Evans’ kidnap gang — Soldier •How he was nabbed Quit notice: Ohanaeze worried over non-arrest of Arewa youths

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (259,096 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (238,370 views) Shameless Genevieve Nnaji exposes breasts in public (195,545 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (169,797 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (165,047 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (146,605 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (127,098 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (121,408 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (112,054 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (105,320 views) Lagos plane crash: Journalist releases victims’ names (105,262 views) APC cries foul as PDP’s Fayose takes early lead in Ekiti governorship election (98,062 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (27) Business (2,600) Business Verdict (17) Columnists (702) Complaints & Requests (92) Enterprise & Opportunities (157) Entertainment (334) Features (461) Global Business Monitor (154) International (1,426) Interviews (124) Live Commentary (28) Love Matters (59) News (25,788) Opinion (736) Pidgin (8) Politics (3,743) Religion (566) Sports (1,281) Stock Watch (18) AMA & Al Jazeera Global Update

 

CBN words on marble advert

 

 

Thousands of Biafrans gather at Nnamdi Kanu’s father’s palace for address...

 

APO Newsbreak logo

 

CLASSIFIED ADS

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement



 

 

CLASSIFIED ADS

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!