President Muhammadu Buhari is seeking approval from the National Assembly for a proposal to borrow $5.85bn from China to modernise the country’s rail network.
Buhari urged NASS in a letter to approve the borrowing because China had a limit on the funds available to African countries from its China Africa Fund.
The president wants to sign loan agreements as soon as China approves the project.
“These loans form part of the overall money for the rail strategy,” Buhari said in the letter.
He said the loans were part of the Federal Government’s 2016-2018 foreign borrowing plan.
The economy is in its second year of recession, brought on by low oil prices, which have slashed government revenues, weakened the naira and caused chronic dollar shortages.
The Federal Government is aiming to boost infrastructure spending to help recover from the recession.
The letter stated that China Exim Bank had approved $1.231bn loan to modernise the rail network linking Lagos to Kano and Lagos to Ibadan.
“We fully intend to source further concession funding to ultimately upgrade this critical line to high speed standard gauge,” the letter said, adding, “These projects form the overall plan to resuscitate the rail transport across the nation.”
Buhari said the Chinese government had told him approval of the Lagos-Kaduna railway modernisation project and Lagos-Calabar, a coastal railway project, were imminent.