Owing to the present state of the economy, speculations have been rife that Nigeria intends to borrow $3.5 billion in emergency loans from the World Bank and African Development Bank (AFDB).
The purported loan is expected to help the country shore up the wide deficit in the 2016 budget.
US-based news platform- Financial Times reported on Sunday, that Nigeria’s loan request is meant to help fund a $15 billion deficit in the budget.
FT also reported that Finance minister, Kemi Adeosun revealed that she was planning Nigeria’s first return to the bond market since 2013.
Adeosun was also quoted to have disclosed 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?” she said.
But according to a report by Reuters, Adeosun stated that Nigeria has held exploratory talks with the World Bank to request for a loan, but has not applied for any emergency loans.
“We have held exploratory talks with the World Bank. We have not applied for emergency loans,” she told Reuters on Sunday.
“Borrowing from international institutions such as the World Bank would be a cost-effective way to raise money to fund the increased capital expenditure in the 2016 budget,” she said.
The finance minister’s interview with Reuters and Financial Times indicates that Nigeria intends to borrow but hasn’t yet applied for the loan and it isn’t an emergency measure.
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