Nigeria to borrow from World Bank and China only

Nigeria wants to borrow at least $1 billion from the World Bank and to sign within months for a $1.3 billion loan from China to fund railway projects, Finance Minister Kemi Adeosun said on Tuesday.

Africa’s biggest economy needs to plug a gap in its record 7.3 trillion naira ($23.17 billion) 2017 budget, which boosts capital expenditures by a quarter to end its first recession in 25 years due to low oil prices.

The government has been in talks with the World Bank for a year and wants to finalise this month a reform proposal necessary for a loan application, according to officials.

“We expected to borrow at least $1 bln dollars,” Adeosun told CNBC when asked about the talks with the Washington-based bank.

“There is also some possibility of doing sector specific intervention in the power sector, they are working very closely with us on power,” she added, without being more specific.

Nigeria had initially promised to submit an economic plan to the World Bank by the end of December but did not do so, sources told Reuters last month.

Adeosun also said Nigeria had been offered by China’s state Export-Import Bank (Exim) a $1.3 billion loan to fund railway projects.

Nigeria will also present a reform proposal to the African Development Bank to release a second loan tranche worth $400 million, officials have said.

The bank had paid out a first tranche of $600 million but has held back the rest pending reforms. Its president has criticized hard currency curbs hitting investment.

On Monday, the central bank made a step towards reforms by devaluing the naira for retail customers. President Muhammadu Buhari had objected a devaluation, but he is on sick leave in Britain.

Adeosun also said the government wanted to harmonise policies with the central bank and that non-oil revenues were improving, with giving details.

She also said there was no need for a loan from the International Monetary Fund (IMF).

“The IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem.”

Adeosun also said one or two banks have yet to remit state revenues via a Treasury Single Account (TSA) at the central bank created in 2015 to combat corruption.

“Interestingly our whistle-blowing programme (to track down graft) actually picks up tips that bankers were being instructed to rename accounts when they knew that the money belongs to the federal government.” She did not name the banks.

($1 = 315.0000 naira)

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