Nigeria to borrow $2billion from World Bank

The federal government has taken steps to secure a $2
billion loan from the World Bank and the African
Development Bank (AfDB) to assist in the implementation of
its policies and programmes for the year.
This was announced by Ngozi Okonjo-Iweala, coordinating
minister for the economy and minister of finance, in an
interactive session with journalists in Abuja.
According to Okonjo-Iweala, the loan was part of the
approved 2012-2015 external borrowing plan of the federal
government and was in line with its efforts to strengthen the
naira.
“We have entered negotiations with international financial
institutions, specifically, the African Development Bank and
World Bank. You know they have some resources for us
already programmed, which is in the borrowing plan,” she
said.
“We have asked them to turn these resources into budget
support for us. We are negotiating for $2 billion that will
come in foreign exchange.
“Remember that the terms of this loan from the AfDB are
quite reasonable at 3 to 4 per cent compared to what you
can get outside, and this is money that they had committed
aside for us and we have decided to draw on it, and use it in
form of budget support to come in form of foreign exchange.
“It will come in two tranches. It will bring in the needed
foreign exchange that will help our private sector people to
have access. So, it will alleviate the situation. It’s
something that we are working on.”
According to analysts, the $2 billion loan in foreign
exchange will enable government regulate the high demand
of the dollar locally and stabilise the exchange rate of the
naira, which fell due to lower government revenue in dollars
caused by low oil prices.
The minister added that the loan would pose no undue
burden on the nation as it was a concessionary loan,
despite the continuous reduction in the nation’s external
foreign reserve.
However, she encouraged Nigerians to reduce their desire
for imported goods, and patronise made-in-Nigeria
products in order to conserve the available reserve for more
productive uses.

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