In an interview in Abuja on Wednesday, Dr Abraham Nwankwo, DMO Director General, said that the loan would not have any negative impact on the economy.
President Goodluck Jonathan had in February sought the approval of the National Assembly to borrow 7.9 billion dollars from the World Bank and the African Development Bank to fund some projects.
``When you talk about the 7.9 billion dollars that Mr President wants to borrow, this is for over the medium term; he is not borrowing for one year,’’ Nwankwo said.
``He is borrowing up to 2015 and it is for specific projects, in agriculture, water supply, education, health, power, things that will help generate the economy.
``We have to appreciate that this is a soft loan; we are talking of concessional loan, moratorium of 10 years, and repayment of 40 years, that means 50 years,'' he said.
Nwankwo said that the burden of the loan would be spread over 50 years, adding that ``it is as good as free money.''
He said that the external borrowing was not only for the Federal Government but for the 36 states and the Federal Capital Territory as well.
He said that water and sanitation projects in some 10 states would benefit from the loan.
``So when we talk about the external debt, it is the external debt of the Federal Republic of Nigeria not of the Federal Government,’’ he said.
Nwankwo said that all the foreign debt of the state governments was part of the six billion dollars external debt of the country.
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