- FG Endorsed €500 Million Loan for Bank of Industry
The Federal Government on Wednesday approved the provision of a Sovereign Guarantee of €500 million from Credit Suisse AG London and other international lenders as security for loan insurance to the Bank of Industry.
President Muhammadu Buhari, who presided over the Federal Executive Council meeting on Wednesday in Abuja, approved the €500 million or N200 billion loan.
Clement Agba, the Minister of State for Finance, Budget and National Planning, explained that the €500 million or N200 billion loan would enhance industrialisation and boost the agricultural sector.
He said the facility expected to be repaid in five years would help create over 1.2 million jobs.
He said, “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.
“The loan will be swapped to Naira by the CBN to mitigate the foreign exchange risk and the fund will, therefore, be available to Nigerian enterprises at a more affordable rate and in local currency.”
According to Agba, who spoke with the press after the meeting, ”Council today (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 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 added that the aim of the facility is to revitalize agro-industrial processing zones, to facilitate the creation of new jobs and support industries.