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Nigeria is taking another $2.86 billion foreign loan

President Muhammadu Buhari explains that the loan will be used to cater for key projects in the 2018 budget.

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Nigeria is taking another $2.86 billion foreign loan play Nigeria's President Muhammadu Buhari (AFP/File)

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  • Nigeria is planning to take a fresh $2,86 billion external loan.

  • President Muhammadu Buhari explains that the loan will be used to cater for key projects in the 2018 budget.

  • The country’s foreign debt stands at $22.08billion  amid growing concerns from the international community.


Nigeria is planning to take a fresh $2.86 billion external loan to fund fiscal deficit and finance key infrastructure projects in the 2018 budget.

This is the fifth external borrowing in the last two years. The government last dollar debt was raised in February 2018 at $2.5 billion.

Nigerian President, Muhammadu Buhari, in a letter, addressed to the National Assembly on Tuesday, October 9, 2018, requested for the approval of a fresh $2,868,540,000 external loan.

The letter reads in part, “Pursuant to Sections 21 (1) and 27 (1) of the Debt Management Office (Establishment Etc) Act, 2003, I hereby request for distinct and specific resolutions of the National Assembly to:

“Issue USD2.786 billion in Eurobonds and other securities in the international capital market for the implementation of New External Borrowing approved in the Federal Government of Nigeria’s 2018 Appropriation Act, for the part-financing of the 2018 budget’s fiscal deficit as well as to finance key infrastructure projects in 2018 budget.

“And issue Eurobonds and other securities in the international capital market for the refinancing of USD82.54 million, being the balance of the five-year, USD 500 million mature Eurobonds.

Nigeria is taking loans to cushion the effect of the huge deficit in the 2018 budget

Africa's largest economy is looking for means to raise capital to fund a record 2018 budget at N9.120 trillion ($29.8 billion).

The country’s privatisation agency had said it will also sell 10 state-owned assets to meet up with key projects in the budget.

Nigeria is selling its state-owned companies to fund a record N9.1 trillion 2018 budget play

Nigeria's vice president, Yemi Osinbajo during the the signing ceremony for the sale of the Federal Government's 12.4 billion Shares in Nigerian Security, Printing and Minting (NSPM) Plc to the Central bank of Nigeria, at the State House, Abuja. September 18, 2018.

(Twitter/ Yemi Osinbajo)

 

The government is expecting to rake N289 billion ($797 million) from the sale.

In spite of the warning by the International Monetary Fund (IMF) over debt levels in African economies, Nigeria said it had to borrow to exit economic hardship on its citizens.

The debt office also assured that Nigeria’s public debt was being managed under statutory provisions and international best practices, adding that there was no risk of default on any loan.

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