Federal government approves $20m loan to Lagos State to enable it address transportation crisis

FEDERAL government ministers have agreed to loan Lagos State $20m to enable it implement its strategic transportation plan that will involve introducing an urban mass transit network to cope with the choking city.

Ranked as the world fourth largest city with a metropolitan population of about 13m people, Lagos chokes under the daily burden of heavy traffic. It is the largest city in the world without an underground railway network of over-ground metro service and with about half of Nigeria's 12m cars based in Lagos, it is jokingly referred to as the world's largest car park.

Although work on an urban railway network began in 2009, it is yet to be completed despite being in the pipeline for 10 years. In a bid to address the problem, the Federal Executive Council (FEC) has approved a loan of $20m to the Lagos State government, which is expected to be spent on a new bus service.

Finance minister Zainab Ahmed, said: “This loan approval of $20m for the Lagos State Strategic Transport Master Plan is from the French Development Agency. The objective of the project is to improve the living conditions of the inhabitants of the Lagos urban area and promote urban development through an efficient and effective transport system.

 “The project has two major components. The first is to rehabilitate urban roads and the creation of minimum of eight equality bus corridors and the creation of two multi-model inter-changes at Marina and Mile Two, while the second objective is to provide technical support for implementation and management."

She added that when completed, the project is expected to impact 1.8m inhabitants of Lagos State and 1.5m users per day. Mrs Ahmed said their assessment is that Lagos State has the capacity to repay the loan.

Also, the FEC approved a $150m loan facility from the African Development Bank and a $50m loan from African Grow Together Fund to finance the Nigeria electrification project. Mrs Ahmed said this is a nationwide initiative to be implemented by the rural electrification agency to build solar hybrid mini-grids, productive appliance equipment for off-grid communities, energising education and institutional capacity building.

Mrs Ahmed said: “When fully implemented, about 500,000 people will be able to have access to electricity for about 105,000 households. The maximum power that will be generated will be 76.5MW, part of which is 68,000MW of solar.

There was another foreign loan approval of $27.3m for the West Africa regional power project. Mrs Ahmed said this aims to connect Nigeria, Niger Republic, Benin Republic, Togo and Burkina Faso with a high voltage 330 kilowatts transmission line to facilitate energy trade.

She said: “The project costs $640m out of which each of the four countries involved has a component. Nigeria has the smallest component in this pact, which is a total loan of $27.3m."