FG requests $1 bln African Development Bank budget support loan

folarin okunola

February 3, 2016 5:19 PM

Nigeria is planning to borrow as much as $5 billion to help fund a deficit due to the slump in global oil prices, which have also sent its naira currency into a tailspin.

Minister of Finance, Kemi Adeosun

Nigeria, reeling from the oil price plunge that has slashed vital revenues, has asked the African Development Bank for a $1 billion loan to help fund an increased budget deficit, the AFDB said on Tuesday.

The bank said it was considering the loan to Africa's largest economy and oil producer, where the drop in crude prices has hit growth, and that an appraisal mission would visit soon to work with authorities.

Finance Minister Kemi Adeosun said this week Nigeria had held exploratory talks with the World Bank and looked at options to borrow from the AFDB and China Exim Bank.

Earlier this month she said that about $4 billion might come from international institutions and the remainder from eurobonds.

Nigeria expects a budget deficit of 3 trillion naira ($15 billion) in 2016, up from an initial 2.2 trillion naira ($11 billion) estimate.

The budget, presented by the president at the end of last year, is sitting with parliament, which aims to pass it at the end of this month.

At 6.08 trillion naira ($30.6 billion), it is a more ambitious budget than under the previous administration and will see capital expenditure tripled compared to 2015 to about 30 percent of the total.

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