Naira Sinking, Nigeria in Talks for Up to $1.5 Billion Of Aid — Wale Edun [VIDEO]

Minister of Finance, Wale Edun

Stabilizing the Naira is our top priority, according to Finance Minister Wale Edun

Nigeria is debating receiving up to $1.5 billion in funding from the World Bank to help ease a severe shortage of dollars, which has contributed to the sharp decline of the naira.

Talks about a $1.5 billion loan to support the budget and boost forex market liquidity are underway between the federal government and the World Bank.

This was said by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, in a statement to Bloomberg TV while attending the World Economic Forum (WEF) in Davos, Switzerland.

According to the Minister, multilateral organizations must provide some kind of support for the reforms pertaining to the elimination of fuel subsidies and the merger of the foreign exchange market.

“We're hoping to get $1 billion or $1.5 billion from the World Bank. It is a matter of discussion at the moment, but we think we will get the support because we are continuing with our reforms.”

 

“What we've done with fuel subsidies, what we have done in terms of the foreign-exchange market reform, deserve support. We've done enough and we deserve to be rewarded imminently," he said.

Utilizing domestic savings of dollars to support the naira

The Minister said that the government's top goal is to stabilize the naira through liquidity in the foreign exchange market. He also looked at domestic dollar savings both inside and outside the official market, mentioning that sales of crude oil continue to be the primary source of income.

According to him, “The priority is to stabilize the naira, that means getting in the additional liquidity - number one from oil revenue.

“We're also looking to make sure we tap Nigerian savings, in particular domestic dollar savings both inside and outside the formal market. There's a lot of cash in the Nigerian economy.”

Getting rid of the FX backlog

Also, he mentioned that the CBN's top priority is still to clear the $5 billion FX backlog.

He said, “There is actually liquidity within the banking system and there should be a way of getting the banks to actually help with that backlog, either on a spot or a forward-rate basis.”

“We believe that if we coral the dollars that are available, we can pay down that backlog almost in one fell swoop.”

See Also: Here's What You Need To Know About The 2024 Fiscal Finance Budget According To Finance Minister

Major issuers have informed Nigeria of the possibility of issuing Eurobonds later this year, the Minister hinted. If the rates are significantly lower, Nigeria may consider doing so.

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