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Nigeria Requests $3.5Billion Loan From World Bank- Financial Times - Politics - Nairaland

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Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by LordVarys: 10:27pm On Jan 31, 2016
Nigeria has asked the World Bank and African Development Bank for $3.5bn in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices. 

The request from the eight-month-old government of President Muhammadu Buhari is intended to help fund a $15bn state deficit, which has been deepened by a hefty increase in public spending as the west African country attempts to stimulate a slowing economy. 

It comes as concerns grow over the impact of low oil prices on petroleum exporting economies in the developing world. Azerbaijan, which last month imposed capital controls to try and halt a slide in its currency, is in discussions with the World Bank and the International Monetary Fund about emergency assistance.

Nigeria’s economy is Africa’s largest and has been hit hard by the fall in crude prices — oil revenues are expected to fall from 70 per cent of income to just a third this year.

Finance minister Kemi Adeosun told the Financial Times recently that she was planning Nigeria’s first return to bond markets since 2013. But Nigeria’s likely borrowing costs have been rising alongside its budget deficit. A projected deficit of $11bn, or 2.2 per cent of gross domestic product, had already risen to $15bn, or 3 per cent, as a result of the recent turmoil in oil markets. 

The $2.5bn loan from the World Bank and a parallel $1bn loan from the ADB, which would enjoy below-market rates, must still be approved by both banks’ boards. 

Ms Adeosun told the FT on Sunday that the loans were not an “emergency” measure but rather the “cheapest way possible” to fund a “deficit budget”.

“I’m getting sub 3 per cent blended costs from the multilaterals and export credit banks. It’s my strategy for borrowing for capital projects. If the World Bank is offering me sub 3 [per cent] to do the power, transport, road projects we need, why would I go to the Eurobond market to find that?”

Under World Bank rules its loan would be subject to an IMF endorsement of the government’s economic policies and bank officials say they would have to be confident the Nigerian government was undertaking significant structural reforms. But both loans would carry far fewer conditions than one from the IMF, which does not believe Nigeria needs a fully fledged international bailout at this point. 

“I think we all agree that Nigeria is facing significant external and fiscal accounts challenges from the sharp fall in … oil prices, as of course are all oil exporters,” Gene Leon, the IMF’s representative in Nigeria, told the FT. But he added that Nigeria was not in immediate need of an IMF programme. “We are not in that space at all.” 

An IMF mission that visited the country in January as part of a regular review estimated that Nigeria’s economy grew 2.8-2.9 per cent in 2015 and predicted it would register 3.25 per cent growth this year, down from an average 6.8 per cent growth in the decade to 2014, Mr Leon said.

The country’s financial buffers are also eroding. The central bank’s foreign exchange reserves have nearly halved to $28.2bn from a peak of almost $50bn just a few years ago. A rainy-day fund that had $22bn in it at the time of the 2008-09 global financial crisis now has a balance of $2.3bn. 
https://next.ft.com/content/aeb1a978-c832-11e5-be0b-b7ece4e953a0

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Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by LordVarys: 10:34pm On Jan 31, 2016
Mr Buhari won elections last year by promising to root out corruption and he has launched an aggressive crackdown since taking office, promising to recover “mind-boggling sums” he says were stolen under the watch of his predecessor, Goodluck Jonathan. 

But the new government is also facing questions about its handling of the economy. Capital controls introduced last year have weighed on growth and the IMF has called for Mr Buhari to pursue alternatives. 

The central bank introduced the first controls before Mr Buhari took office last May, but many new measures have been imposed since and the president has repeatedly voiced his support for them. 

During a January visit Christine Lagarde, the IMF’s managing director, urged the government to allow the naira to trade more freely so that it could help absorb economic shocks. “It can also help avoid the need for costly foreign exchange restrictions, which we don’t really support," she said in an address to parliament.

Some see a growing case for outside help. Nigeria’s current economic troubles are “exactly the situation an IMF loan was created to deal with”, said John Ashbourne, economist at Capital Economics. Although Mr Buhari has promised reforms, they would take time to work and “getting money from abroad would help him do that”, he said.

But Mr Buhari and his government are likely to resist a full IMF rescue programme. The former military ruler butted heads with the IMF while leading the government in the 1980s and many observers believe he would be reluctant to invite the fund in again.

The World Bank loan would come as part of its “development policy” lending, which the bank uses to lend help to countries facing short-term financing difficulties. Such loans, known as “development policy operations”, often come alongside formal IMF bailouts, but they can also be independent of the IMF.

During the 2008-09 crisis the World Bank used such loans to help developing countries, including Nigeria. And because of the growing problems facing many commodity-producing emerging economies, bank officials say they are seeing demand rising again.
https://next.ft.com/content/aeb1a978-c832-11e5-be0b-b7ece4e953a0

3 Likes 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by psucc(m): 10:35pm On Jan 31, 2016
I can recalled an article that said 'when world bank visits, tears follows'. This was the primary reason of the World Bank President's' visit. But our govt were busy denying it just like OBJ denied his third term plot at the beginning.

Sincerely, the said budget has no inbuilt mechanism that will stimulate the economy as it is the usual 80-20 Recurrent-Capital stuff.

For goodness sake, what stops us from cutting out coat according to our size?

92 Likes 11 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by LordVarys: 10:36pm On Jan 31, 2016
Lalasticlala, obinoscopy, mynd_44
Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by AbuMaryam1(m): 10:37pm On Jan 31, 2016
We trust the head of the government, no more ATM Dusuki. Handcuffs and shake is still existing. No shaking Buhari carry go.

5 Likes 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by MrPeterson(m): 10:38pm On Jan 31, 2016
Yakubu your life is being mortgage

23 Likes

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by EternalTruths: 10:41pm On Jan 31, 2016
Hiss

Buhari wants to Osunize Nigeria with debts angry

52 Likes 4 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by EternalTruths: 10:44pm On Jan 31, 2016
AbuMaryam1:
We trust the head of the government, no more ATM Dusuki. Handcuffs and shake is still existing. No shaking Buhari carry go.

Who are the WE.

Buhari is a confused President angry

136 Likes 13 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by thundafire: 10:48pm On Jan 31, 2016
HAHAHHAAHAH cc mny after u will blame GEJ 4 helping u mismanage dy budget but u lack complete ideology in ruling naija i guess u taught u wer in ur daura town filled with almajiris PMB u re a failure by dy tym we approach 2018 u will borrow upto a trillion nd still blame past gov.

45 Likes 2 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by tinkinjow: 10:50pm On Jan 31, 2016
Chai! My fears all along now unfolding in my very eyes.

44 Likes 2 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Descartes: 10:52pm On Jan 31, 2016
Risky shocked shocked

Kemi Adeosun is a clueless, crude and incompetent Finance Minister who lacks the will and expertise to steer the sinking mono-economy of zoogeria in this trying time.
She should resign now or get sacked.

36 Likes 4 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by dunkem21(m): 10:53pm On Jan 31, 2016
..

1 Like 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Nobody: 10:56pm On Jan 31, 2016
Why won't we borrow, saudi arabia' external reserves is $600 billion, Algeria has $155 billion, yet they have better infranstructure than ours.

Pity Nigeria

21 Likes 2 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by benpedro(m): 10:57pm On Jan 31, 2016
borrowing to fund budget?worst of all a budget recurrent expenditures,lai Mohammed getting more for information than the ministry of agriculture which could be the only viable solution to the fall of oil.well say or think what you can,but i believe Nigeria is heading for the ROCKS and i mean literally!

27 Likes 4 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Atmmachine(m): 10:58pm On Jan 31, 2016
I wish the world Bank will decline their loan request

42 Likes 4 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by cutetopsey(f): 11:02pm On Jan 31, 2016
ok

1 Like

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by ibkgab001: 11:03pm On Jan 31, 2016
Very soon this country will be sold off at Pawn shop with the level of all debt....

13 Likes 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Nobody: 11:03pm On Jan 31, 2016
shocked yam is ready

Everybody get you plate

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Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by eagleeye2: 11:03pm On Jan 31, 2016
AbuMaryam1:
We trust the head of the government, no more ATM Dusuki. Handcuffs and shake is still existing. No shaking Buhari carry go.
Buhari the god of APC Z.....omb.....ies and almajiri

31 Likes 3 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by chesterlee(m): 11:03pm On Jan 31, 2016
We are now borrowing heavily to fund the budget!



Kai....There was a Country!!!

4 Likes 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by drss(m): 11:04pm On Jan 31, 2016
borowing $3.5 billion to purchase bmw cars, N700 million website, N1.7 billion aso rock feeding, N182 million for tires, N3 billion aso rock renovation, N38 billion for propaganda n many other frudulent items in d budget of yams. APC govt will bury dis con3 in debts.

75 Likes 11 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by benpedro(m): 11:04pm On Jan 31, 2016
InstaDon123:
Meanwhile Dasuki the father Christmas stole full 2billion dollars. Chai
you must be so gullible to believe that

32 Likes 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by passionate88: 11:04pm On Jan 31, 2016
The presidiot want to sell Nigeria o.... Shey they said he'll refuse any advise to take foreign loans?, what's the presidiot doing now?.

23 Likes 2 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Firefire(m): 11:05pm On Jan 31, 2016
Gbese re ooooo

7 Likes 3 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by gbengaizzy(m): 11:06pm On Jan 31, 2016
IMF will require that Nigeria devalue it's Naira

7 Likes

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Firefire(m): 11:06pm On Jan 31, 2016
Obiagelli:
Why won't we borrow, saudi arabia' external reserves is $600 billion, Algeria has $155 billion, yet they have better infranstructure than ours.

Pity Nigeria

Wonderful!

5 Likes 2 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Tekzyflex(m): 11:06pm On Jan 31, 2016
Let's enjoy the rotten fruit of change.

9 Likes 1 Share

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Descartes: 11:06pm On Jan 31, 2016
shocked

Zoogerians would have allowed Buhari to continue with his cow rearing business and its massaging technology in the remote village of Daura than bringing in the senile dictator who has no background on democracy and rule of law coupled with his poor economic management than disgracing himself and his supporters with poor economic policies which are crude to what is obtainable in the 21st century.
Indeed Buhari's much taunted integrity and frugality are nothing but a RUSE cheesy

24 Likes 2 Shares

Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by Frankiss44(m): 11:07pm On Jan 31, 2016
It is well...
Re: Nigeria Requests $3.5Billion Loan From World Bank- Financial Times by asEdeyHOT: 11:07pm On Jan 31, 2016
Like it is unexpected? Right?

When The buffoon called Jonathan spent all the nation's finances to fund his failed second term aspirations

Nigeria is a mono economy and the oil we depend on is currently almost valueless, so what are the options?

Borrow and use the money judiciously

God bless Buhari

10 Likes 2 Shares

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