FEC approves $618m loan for fighter jets, others

The Federal Executive Council (FEC) has approved a loan of approximately $618 million from a consortium of financiers to purchase six fighter aircraft and ammunition for the Nigerian Air Force.

This announcement was made by the Minister of Information and National Orientation, Mohammed Idris, during a press briefing in Abuja on Wednesday after the FEC meeting chaired by President Bola Tinubu.

In addition to the defense procurement, the FEC approved N740 billion for the Berger section of the Abuja-Kano highway, alongside several other significant road development projects.

Idris, standing in for the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, detailed the FEC’s approvals. “From the Honorable Minister of Finance, who is away on official duty in the United States, I’m going to let you know what those FEC approvals are,” he stated.

“The first one is that there have been approvals for some contracts, about seven of them for the Nigerian Customs Service. The next one is an approval for an agreement for the elimination of double taxation concerning income taxes and the prevention of tax evasion and avoidance between Nigeria and the Hong Kong Special Administrative Region of China.”

He continued, “The third one is an approval to obtain a credit facility of 443,330,781.49 euros and another $141 million from a group of financiers for the procurement of six units of M346 fighter aircraft and ammunition for the Nigerian Air Force. And the last one from the Federal Ministry of Finance is the approval for signing of an agreement for the elimination of double taxation regarding income taxes and preventing tax evasion between Nigeria and the Republic of Botswana.”

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Earlier this month, the Nigerian Air Force announced its plan to acquire 24 M-346 combat jets and 10 AW109 Trekker helicopters as part of a fleet renewal strategy. The first three M-346 jets are anticipated to arrive by early 2025, with additional deliveries scheduled through mid-2026.

Moreover, the FEC approved the establishment of a Creative Economy Fund aimed at fostering growth in the sector. Minister of Arts, Culture, Tourism, and Creative Economy

Hannatu Musawa, shared details of the initiative. “FEC gave approval for the creation of a Creative Economy Development Fund. This is a special purpose vehicle that will allow members within the creative economy to have access to funding and use their IP as collateral in terms of monetization,” she explained.

Musawa highlighted that foundational structures were needed to fully harness the creative economy’s potential. “IP policy is one of those very basic structures that was missing. We are working with the Ministry of Industry, Trade and Investment and the Ministry of Justice to deliver an IP policy hopefully within the next two weeks,” she noted.

She further mentioned, “We already have a commitment, for example, from Afreximbank that has committed to giving us $200 million and a number of other sources. This is a special purpose vehicle that will allow us to give this funding to members within the community, aiming for economic expansion, creative growth, cultural enrichment, and job creation, especially for the youth.”

On infrastructure developments, Minister of Works, Dave Umahi, elaborated on the government’s strategy to address the backlog of projects. He confirmed that major rehabilitation is underway on the Shagamu-Benin road, while procurement for its complete reconstruction is in progress.

Umahi noted that the Abuja-Kano road would proceed without a tax credit arrangement, with N740 billion allocated for the 162-kilometer Berger section. He outlined various ongoing projects, including the Sokoto-Badagry road construction and the revival of the long-stalled Oyo-Ogbomoso road.

The FEC also discussed the significant inherited debt of N1.6 trillion associated with 2,604 projects, totaling N13 trillion in contract value. Umahi emphasized a phased approach to project completion based on available funding, mentioning several key road projects across the country.

He stated, “Finally, we presented a memo to FEC that where there is proof of funds, there are available funds, the Procurement Act allows MDAs to pay a maximum of 30 percent advance payments.” He clarified that this advance payment is not mandatory and highlighted the need for clarity regarding contractors’ mobilization.

Additionally, the Minister of State for Petroleum Resources, Ekperikpe Ekpo, addressed the government’s initiative to convert fuel stations nationwide to Compressed Natural Gas (CNG) dispensaries. He emphasized the safety and cost-effectiveness of CNG as an alternative fuel, stating, “Today at the Federal Executive Council, the President has given a charge… CNG has come to stay, and we have to follow that route.”

Ekpo highlighted the significant cost savings associated with CNG, noting that while a liter of fuel may cost N1,000, CNG would be available for just N200, creating an N800 savings.

The FEC also approved the distribution of one million science textbooks to public secondary schools across the country, aimed at addressing deficiencies in key subjects such as physics and mathematics. Lokpobiri, on behalf of the Petroleum Technology Development Fund, stated, “This program is meant to print one million science textbooks that will be distributed… to support the 104 unity schools and 122 special schools in the country.”

This initiative is part of a broader effort to strengthen Nigeria’s educational infrastructure, with plans to establish both digital and physical libraries in approximately 1,000 secondary schools nationwide.

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