Nigeria Set To Collect $2 billion World Bank Loan
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 is quoted as saying by The Cable.
“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.”
Analysts forecast that , 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.
Reports of the federal government being broke are gathering pace as it is taking steps to cut excess spending. Recently the federal government slashed the budget allocations for different ministries and even for the National Assembly.
The situation has gone so far that states are unable to pay workers salaries. Osun state on Thursday announced that it had to borrow money to pay salaries.
The Nasarawa state government also announced in February that it had gone to great lengths to secure a N500 million bank facility to pay the February salary of workers in the state.