Railway Projects: Perm Sec Tasks BoI On Low Interest Funding

Permanent secretary, Federal Ministry of Transportation/Marine and Blue Economy, Dr. Magdalene Ajani has reiterated access to low-interest financing for railway projects in the country. Ajani said this is part of move to meeting the ministry’s objectives of upgrading and expanding the nation’s railway networks.

The permanent secretary made the disclosure in Abuja at a meeting with officials of the Bank of Industry (BoI), led by its Divisional Head, Large Enterprises, Dr. Isa Omagu.

“We are looking for a single digit interest rate. It was earlier negotiated for 7.5 per cent interest rate. But we are looking for six per cent interest rate to fund various railway projects in the country”, Ajani stated.

Dr. Ajani further revealed that one of the greatest challenges confronting the Ministry is funding, pointing out that contractors’ inability to provide 85 percent funding for rail projects across the country has led to the very slow pace of railway connectivity, because the 15 per cent counterpart funding from the Federal Government cannot see to the completion of the projects. She therefore, 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.
She said Port Harcourt to Maiduguri railway project is of huge importance to the government, pointing out that improved rail transportation does not only enhance connectivity, but also contributes to economic growth, job creation and environmental sustainability.

Ajani enjoined the Bank’s representatives to also revisit discussions with the Nigerian Maritime Administration and Safety Agency (NIMASA), on how to manage the Cabotage Vessel Financing Funds (CVFF), which 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.
In a similar vein, the Permanent Secretary enjoined BoI to reach out to the National Inland Waterways Authority (NIWA), to get standard boats for local transportation, so as to minimise accidents.

Speaking earlier, the Divisional Head, Large Enterprises, Bank of Industry, Dr. Isa Omagu thanked the Permanent Secretary for allowing them to meet with her, saying “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 added
Speaking further, Dr. Omagu revealed that the Bank is presently in 29 States, saying they are soon going to open a branch in Uyo, Akwa Ibom State making it the 30th State, while noting that transportation is an infrastructure across board, and critical in national development.

The divisional head, Large Enterprises, Bank of Industry also used the opportunity to brief the Permanent Secretary on what the Bank has done so far with other Ministries and organisations.
He explained that the Bank of Industry is the Nigeria’s oldest, largest, most successful and developmental financial institution, adding that it was incorporated in 1959, and one of the 25th government agencies under the Federal Ministry of Trade and Investment.

Omagu during the presentation stated that BOI is guided by the Nigeria Economic Recovery Plan, and transforms Nigeria’s industrial sectors by providing financial support and services, saying it provides short term, medium, and large term loans.

He further explained that companies must have up to 25 percent equity investment they have done before loans or facilities will be given, stating that repayment could be monthly or quarterly, depending on the cash flow of the company or Organization.