Nigeria to borrow $2bn from AfDB, W/Bank to support budget: As revenue tightens on account of soft oil prices, Nigeria has now advanced negotiations with both the World Bank and African Development Bank (AfDB) to borrow about $2 billion to enable it implement its N4. 4 trillion 2015 budget.
The National Assembly has agreed to pass the budget on March 31, Ngozi Okonjo-Iweala, coordinating minister for the Economy and minister of finance, said yesterday as she announced plans for the extra borrowing. The loans are soft, coming at reasonable conditions of 3 to 4 percent interest rate, five years moratorium and over 25 years repayment period. The terms have not been agreed completely but “these are the standard terms for us at this time,” she told some select journalists in a meeting with her in Abuja.
The loan will be disbursed in two tranches and according to her, is already captured in the government’s present borrowing plan. “This is one more thing that the government is doing to also help ameliorate the present tough situation,” she said. The loan will come in foreign exchange through the Central Bank of Nigeria and is expected to bring in some needed foreign exchange that can be available also for the private sector, especially manufacturers, to access. Speaking on the recent developments in the economy, Okonjo-Iweala admitted that revenues have been substantially impacted by the fall in oil price, and that the Federal Government has been working out strategies to close budget gap through increasing non-oil revenue as well as cutting costs.