FG Obtains New $2.25 Billion Loan From World Bank

Wale Edun

THE World Bank and the African Development Bank (AfDB) are expected to provide the federal government with a new $2.2 billion single-digit interest loan and another budget assistance facility, respectively.

Following Nigeria's participation in the World Bank/International Monetary Fund (IMF) Spring Meetings in Washington, DC, the Minister of Finance, Wale Edun, revealed this information during a press briefing.

Speaking about the sources of foreign finance for the Nigerian economy, Edun mentioned facilities provided by the World Bank and other international development partners, as well as remittances from the diaspora.

He remarked, “We have qualified for the processing just this week to the Board of Directors of the World Bank of a total package of $2.25bn of what you can call 'the closest you can get to a free lunch'; virtually a grant. It's for about 10 to 20 years moratorium and about one per cent interest.

“In addition, there is a similar budgetary support low-interest funding from the African Development Bank (AfDB) and, clearly, there are also ongoing discussions with foreign direct investors across many sectors.”

In an effort to draw foreign exchange inflows into Nigeria, Edun also issued dollar-denominated securities with a specific target audience in mind: Nigerians living abroad and those with savings in foreign currencies.

He stated that later this year, the federal government intended to issue the bonds.

He emphasized the efforts made by the fiscal sector of the economy to support the Central Bank of Nigeria's (CBN) recent monetary policy adjustments.

He said that the issuance of government securities at interest rates that are more in line with the CBN's Monetary Policy Rate (MPR) was a sign of cooperation between the country's two main economic sectors in combating inflation and drawing foreign exchange inflows.