Minister of finance and coordinating minister of the economy, Wale Edun has disclosed that the federal executive council has also approved a concessionary budget support loan of $1 billion from the African Development Bank (AfDB).
He disclosed this to State House correspondents yesterday after the council meeting presided over by President Bola Tinubu at the Presidential Villa.
According to him, an inherited loan processing involving $100 million from the African Development Bank and $15 million from the Canada-African Development Bank Climate Fund for Abia State’s waste management and road rehabilitation projects in Umuahia and Aba were approved.
He said “at the same time, I would like to give a summary of the memos that I had approved at Council today and of course, they were all to do with financing.
“First of all, there was an inherited financing, an inherited loan processing, which was to do with the $100 million financing from African Development Bank and $15 million from the Canada-African Development Bank Climate Fund.
“Essentially, it was processed before this administration came in and, so it has been inherited. Essentially, it is concessional borrowing, around for 4.2% per annum by Abia State, through the federal government.
“So, the funds are to be lent to Abia State and they are for waste management and rehabilitation of roads in Umuahia and Aba, in particular. That was approved.
“Second, there was financing of $1 billion, concessional financing, 25 years, eight years moratorium at about the same for 4.2% per annum, which was approved by the African Development Bank for this administration and really, it was in recognition of the macroeconomic measures that have been taken, the swift movement towards macro stability, restoring revenue, improving the foreign exchange situation, and so forth, that have been taken by this government.
“The reward, as far as the African Development Bank, a concessional financing organization, was to provide $1 billion in general budget support
In a bid to optimize market opportunities and enhance financial flexibility, Edun said the council approved a total limit of N2 trillion for the Ministry of Finance.
According to him, this allocation aims to facilitate strategic market movements, potentially reducing debt servicing costs by around N50 billion through debt refinancing with more favorable terms.
He said the measures reflect the government’s commitment to financial prudence and sustainable economic growth.
According to him, “finally, in order to keep working hard and maximizing the ability of the government to use the markets and to take advantage of different situations and improve situations, the Federal Executive Council approved a total limit of N2 trillion to be available for use by Ministry of Finance in order to go in and out of the market and essentially to, where possible, bring down the rate of interest on the current outstanding.
“So essentially, it will be refinancing and the view is that there will be an opportunity to save about N50 billion or more in debt servicing over time by giving back expensive debt refinancing with cheaper funding. Thank you.
Edun also disclosed that the Presidential Fiscal Policy and Tax Reforms committee headed by Taiwo Oyedele, briefed the Council on its recent report presented to the President
He said one key policy initiative emerging from the committee is the proposal to remove VAT on diesel, designed to stimulate revenue growth.
He revealed that the committee has affected the economy, helping to boost fiscal position of the government and assisting to increase tax revenue to GDP, to 18% in Nigeria, from the current 7.5%
During his briefing, the Attorney General of the Federation (AGF) and Minister of Justice, Lateef Fagbemi, presented a crucial memo seeking approval for the draft national report for the fourth cycle of the United Nations Universal Periodic Review (UPR).
He said Nigeria, being a member of various international jurisdictions, follows the practice of periodically reporting its human rights records at the United Nations.
According to him, the last report was submitted in 2018, and the upcoming meeting in February 2024 will review the reports submitted since then.
Fagbemi emphasized the significance of adhering to the reporting schedule and proposed that Nigeria proactively submit its report ahead of the February 2024 meeting.
The report, he said compiled after extensive engagement with critical stakeholders across the six geopolitical zones and involving all three tiers of government, encompasses national, state, and local government levels.
He said Council approved the submission of this comprehensive report to the United Nations for consideration in the Human Rights Universal Periodic Review.
He said this proactive step reflects Nigeria’s commitment to transparency and accountability on the international stage, showcasing a meticulous approach in addressing human rights matters and participating actively in the global discourse on the subject.