Monday, February 1, 2016

Nigeria seeking loan from World Bank

Nigeria is holding talks with the World Bank to help it fund a forecast $11bn (£7.7bn) budget deficit.

However, Finance Minister Kemi Adeosun said in a statement that it was not applying for an "emergency loan".

Nigeria is believed to be looking for around $3.5bn from the World Bank and the African Development Bank.

Africa's largest economy has been hit hard by the recent fall in oil prices, and the government needs to find new sources of income to fund its budget.

Last year's government budget was largely financed by oil revenue.

Ms Adeosun said that "Nigeria, as a member of World Bank group is entitled to access available funds like every member-country," but she is also looking at the domestic market as a means to get finance.

"No application for loans have been made. We are simply discussing options for funding [the] 2016 budget," she added.

Chief Africa economist for Standard Chartered bank Razia Khan told the BBC that going to the World Bank could be attractive as it may offer Nigeria better terms for a loan than it would get from the international money markets.

Nigeria is deliberately boosting spending on infrastructure development to try to boost the economy as it tries to deal with the oil price shock, she added.

The country is also under pressure to devalue the currency, the naira, as it tries to cope with the impact of the declining oil price.


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