FEDERAL MINISTRY OF FINANCE

News Release. September 14, 2012

UPDATE ON LOAN FACILITY FOR ABUJA LIGHT RAIL, NEW AIRPORT TERMINALS AND GALAXY BACKBONE

This update is being issued in response to many enquiries received by the ministry on the $1.1 billion soft credit recently obtained by the Federal Government from the Exim Bank of China for the above projects.

Please note the following:

- One of the new airport terminals will be located in Lagos, the commercial hub of the country which experiences more air traffic than any other city.

- The terms at which the soft credit was obtained are very favourable. It is a concessional credit obtained at 2.5% interest, compared to about 16% or higher from Nigerian banks. The repayment period is 20 years with a grace period of seven years.

- The projects are high priority, high impact ones which are designed to have practical economic effect and make life better and more convenient for Nigerians from all socio-economic groups.

- For instance, the Abuja light rail project in the Federal Capital Territory will significantly improve the lives of Nigerians especially those in the lower socio-economic groups who have to travel great distances from their homes on the outskirts to their places of work in the city. One part of the intra-city rail network will extend from the city centre to Kubwa and the Nnamdi Azikiwe International Airport. The second will run from the city centre to Masaka in Nassarawa State. Both are high density, high traffic routes.

- The new airport terminals will help Nigeria achieve the status of a hub on the continent and create jobs. The terminals will also help to grow passenger capacity to over 50 million from the current 20 million and increase the number of direct and indirect jobs in the sector to 1.5 million from the current 60,000.

- The Galaxy Backbone, will boost the sophistication and effectiveness of the government’s efforts to tackle security challenges and improve connectivity to modern technology, especially for Nigerian youths in underserved rural areas.

Paul c Nwabuikwu,
Senior Special Assistant to the Coordinating Minister for the Economy and Minister of Finance