Nigeria in request of $3 billion loan from World Bank, AfDB, others

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The World Bank is an international financial institution that provides loans to developing countries for capital programs. Source: Wiki

Nigeria is conversation with the World Bank and African Development Bank for $3bn loans before it determines how much it will raise from Eurobonds to help fund this year’s budget.

“From the World Bank, we are hoping to get $2bn,” the Minister of State for Budget and National Planning, Zainab Ahmed, said in an interview on Tuesday in Abuja, Bloomberg reported on Wednesday.

While the African Development Bank in November disbursed $600m of a $1bn loan, the Federal Government wants the Abidjan-based lender to top up the remaining $400m.

“We are talking to see whether they can up it to $1bn,” she said.

Lawmakers are debating the 2017 budget of a record N7.3tn that the Budget ministry said would help to boost an economy that shrunk by 1.5 per cent last year, the first contraction since 1991.

This came after lower prices and production of oil and shortages of both foreign currency and power weighed on output.

The government raised $1bn of Eurobonds in February and a further $500m last month to finance projects approved in the 2016 budget.

Ahmed said the government would return to the market for a new fundraising round for this year’s spending plans.

Yields on the bonds sold in February and maturing in 2032 were little changed at 7.23 per cent as of 1pm on Wednesday.

“We should be able to do higher than what we borrowed in 2016,” she said.

“It will be determined by how much we get from the World Bank and African Development Bank because that’s a lower rate. Our preference is always to get the lower rate first.”

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