Why Nigerian govt takes loans – Minister

The Minister of State for Budget and National Planning, Prince Clem Agba, said on Saturday the Federal Government has been taking loans to fund infrastructure upgrade and social welfare packages for Nigerians.

The minister, who stated this while inspecting the ongoing 7.5 kilometres Rural Roads Intervention Project initiated by the federal government in Lejja, Nsukka local government area of Enugu State, said the loans taken by the current administration were in the interest of the citizens.

He said the loans were taken with only a 3 percent interest rate and a moratorium of 10 to 20 years.

Agba said: “A lot of people talk about the borrowings by the present government. You need to understand the terms and conditions of the loans we are taking and what they are being used for. What is bad is when you borrow to eat, but if you borrow for something productive, you benefit.

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“The interest rates we are paying for these loans we are taking is not up to 3 percent and we have a 10 to 20 years moratorium. That is within those periods, we are not paying anything and some of the loans have up to 40 years repayment period. So, if you look at what it would take to pay back the loans we are taking, it could be considered as gifts.

“We are trying to connect our rural roads to urban roads and to the railways. You could see that we are spending a lot of money across the country on road construction. But if we don’t develop our rail sector, our roads would continue to fail because of the pressure on them. In other more developed countries, heavy things are being moved on rails. That’s what we are trying to do.”

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