In a bid to expedite the upgrade and expansion of the country’s railway networks, the Federal Ministry of Transportation is seeking to access low-interest loans from the Bank of Industry (BOI) to fund railway projects nationwide.
The Permanent Secretary of the Federal Ministry of Transportation/Marine and Blue Economy, Dr. Magdalene Ajani said during a meeting with officials of the Bank of Industry (BoI), led by its Divisional Head, Large Enterprises, Dr. Isa Omagu, in Abuja recently.
- “We are looking for a single digit interest rate. It was earlier negotiated for 7.5 percent interest rate. But we are looking for 6 percent interest rate to fund various railway projects in the country”, the Permanent Secretary said.
She pointed out that paucity of funds to finance the railway projects nationwide across the nation was a major challenge as the 15 per cent counterpart funding from the Federal Government alone is insufficient to complete the projects, hence the slow pace of rail connectivity.
In light of the issue of funding, Dr Ajani further called on the Bank of Industry to assist, by partnering with the Ministry in providing low interest funds.
- “We currently have about four or five projects; the central rail line to link Itakpe to Abuja. We also have part of Lagos to Ibadan; Port Harcourt to Maiduguri and the Coastal rail line project,” the Permanent Secretary stated.
Dr Ajani said the Port Harcourt-Maiduguri railway project was of huge importance to the government, stating that improved rail transportation would enhance connectivity, create jobs and contribute to economic growth.
Furthermore, the Permanent Secretary of the Ministry of Transportation/Marine and Blue Economy urges the Bank’s representatives to revisit discussions with the Nigerian Maritime Administration and Safety Agency (NIMASA), on how to manage the Cabotage Vessel Financing Funds (CVFF).
Nairametrics reports that the CVFF is an intervention fund created by the Federal Government for the development of indigenous shipping operators in Nigeria to enable them maintain existing vessels or purchase new ones.
Ajani also enjoined BOI to get in touch with the National Inland Waterways Authority (NIWA), to procure standard boats for local transportation, so as to reduce accidents on domestic waterways.
In his remarks, the Divisional Head, Large Enterprises, Bank of Industry, Dr. Isa Omagu reiterated the Bank’s commitment to collaborating with the Ministry.
- “We are mandate bank, always looking for where to collaborate. We are here to look for opportunities to work on areas the Ministry needs our partnership. We play different duties including oil and gas as well as maritime”, he said.
Dr Omagu stressed how important investments in transportation infrastructure is, especially in terms of national development.
He also disclosed the Bank’s plan of opening a branch in Uyo, , which would make Akwa Ibom the 30th state the bank has physical presence in.
BOI’s Divisional Head of Large Enterprises further explained that the Bank is guided by the Nigeria Economic Recovery Plan.
According to him, BOI is committed to transforming Nigeria’s industrial sectors by providing financial support and services, ranging from short-term to medium-term and to large-term loans.
Also, Omagu pointed out that companies or organizations that are seeking loans from BOi must meet the requirement of having up to 25 percent equity investment first before loans be given, adding that repayment could be monthly or quarterly.