The Federal Government has approved foreign loans worth a total of $945 million to improve irrigation system, prevent flooding in Ibadan, Oyo State and provide water for Bauchi, Ekiti and Rivers states.
At its weekly Federal Executive Council (FEC) meeting, which was chaired by Vice President Namadi Sambo, in the absence of President Goodluck Jonathan who is in Burkina Faso on a peace mission, the government also approved contracts worth N22 billion for the road sector.
Briefing journalists after the meeting, Bashir Yuguda, the minister of state, finance, said following a memo presented by his ministry, council approved the International Development Association’s (IDA) credit of $495 million for proposed irrigation management.
Yuguda, who briefed journalists alongside ministers of special duties, Taminu Turaki; water resources, Sarah Ochekpe; agriculture and rural development, Akinwunmi Adesina and Niger Delta affairs, Stephen Oru, said the facility has a five years grace period, a repayment period of 20 years and with a service charge of 0.75 percent.
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The loan also attracts an interest rate of 1.25 percent per annum and a commitment fee of 0.5 percent per annum.
According to Yuguda, the facility is meant to upscale what the Federal Government is doing to improve the irrigation system to ensure a year-in-year-out farming season in the country.
“Part of the fund under this IDA credit is to upscale the cultivation of the irrigatable land in the country. Currently, we have an estimated 2.2 million hectares of potentially irrigatable land in the country out of which about 1 million hectares is situated in the Northern part.
“The beneficiaries for this loan which will be managed by the Ministry of Water Resources are on four components. One is water resource management and dam operation improvement to the tune of $81 million. Irrigation development and management to the tune of $294 million. Enhancing the agriculture productivity and support the value chain development is $38 million. Governance and institutional framework is $30 million and the contingency under this programme is about $52 million.
“For specific intervention for the $495 million, the Bakolori Dam and Irrigation Scheme in Zamfara State will benefit. We are talking about the rehabilitation of the dam which has an existing 8,000 hectares irrigation scheme, recovering the over 1,557 hectares lost due to poor drainage and converting 13,000 hectares of abandoned areas”, he said.
Council also approved a $200 million loan to arrest the frequent flooding ravaging Ibadan, Oyo State.
“We have all been witnessing the floods that have happened in Ibadan, the first one was in 1980 and the second one in 2011.
“Some remedial works were carried out to avert the future occurrence of flooding in the city but we believe, with this credit facility of $200 million, we will be able to arrest the frequent flooding within the Ibadan city.
“The idea is to work with the Ministry of Water Resources and Ministry of Agriculture in order to arrest the situation,” Yuguda said.
Council also approved $250 million for the proposed third national urban water sector reform project, which will serve about one million Nigerians from the project in the three states.
Yuguda explained that the Federal Government would take the facility and lend to Bauchi, Ekiti and Rivers states.
The project which would be implemented over a period of six years has components which include water sector governance, institutional frame work and human capital development, sector wide improvement and project management at the federal level and sector reforms on water.
The facility will also address the increasing demand on water in the affected states.
Explaining the foreign loan for irrigation, Ochekpe said 50,000 hectares of land would be improved for cultivation over a period of seven years, adding that five irrigation schemes across the country are involved in the project.
Major beneficiaries include the basin stakeholders, the irrigation and drainage entities and the Water Users’ Association Federation.
“In each of the irrigation scheme, we expect that 550 multiple, secondary and tertiary level water users’ associations will be strengthened with different capacity and skills in managing water resources for improvement in their agricultural activities.
“About 140 farming families at the average of 12 persons per family will be involved in this project. We expect that the villages within the catchment areas of the project will also benefit from a cross range activities that will be undertaken in the cause of implementing this project.
“We expect over 10 million people will benefit from the flood emergency information system and flood forecasting tools that will be developed within the three hydrological basins where the projects are sited.
“One major benefit of the project that we expect is the increase in the income of the households that will be participating. We expected that their incomes will rise from N259,000 annually to N781,000, about three times more than that of farmers operating within non-project area.
“The project was approved by the World Bank board in June 2014 and it is to be effective within this month”, she said.
Council also awarded the contract for the construction of Mbaise Ring Road intersecting Owerri-Umuahia Road in Imo State for N6.178 billion, with a completion period of 18 months.
Oru added that the construction of Calabar-Oban-Nsan-Okoroba-Ajassor Road in Cross River State was awarded for N9.067 billion with a completion period of 24 months.
The other two road projects were the Phase 1 of Mbak Mkpeti-Itu-Okoita-Arochukwu Road in Abia, Cross River and Akwa Ibom awarded for N3.55 billion with a completion period of 24 months; and the Mbak Atai-Ikot-Ntu-Mkpeti-Okuiboku Road in Akwa Ibom, awarded at the cost of N3.246 billion with a completion period of 18 months.
ELIZABETH ARCHIBONG
