Nigeria to secure $2bn loan from China to finance 2016 Budget

Nigeria to secure $2bn loan from China to finance 2016 Budget

The Minister of Finance, Kemi Adeosun and the Central Bank Governor , Godwin Emefiele are to visit China in a bid to secure $2bn loan for the country.

The loan is aimed at financing the 2016 budget which has a record deficit of N2.2trillion, Reuters reports.

Speaking with Reuters, a Nigerian Government official said President Muhammadu Buhari may sign any loan agreement during the Minister’s trip to Beijing by March.

The source said, “The finance minister, in the company of the central bank governor, is scheduled to be in China sometime next week to conclude negotiations on the $2 billion loan.”

According to the source, negotiations had been underway for some time, adding that the terms were yet to be agreed.

“Hopefully it may be sorted out during this meeting and the loan will be signed during President Buhari’s visit to China in March this year,” the source said.

It would be recalled that Adeosun had recently admitted at a KPMG forum in Lagos that the country was looking for a loan with about 1.5 percent interest.

“We looked at our debt profile and we recognized that one big problem is interest rate. So, we are going to try and borrow as far as possible externally,”

“We are borrowing first of all at the cheapest rates. So, multilateral loans are the cheapest. If someone offers me 1.5 per cent over 20 years, I think I should take it. So, that is why we are going to the multilateral agencies first and thereafter concessional borrowing and also tap into the Eurobond market.

“We are doing about N900 billion of the deficit in domestic and N900 billion in external borrowings. We are trying not to crowd out the private sector in the domestic debt market, that is why we are looking at external borrowings also,” she said.

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