– The Nigerian government has approved a three-year plan to borrow more from abroad
– This is as a result of the country sliding into recession
– The government has struggled to fund the 2016 budget aimed at cushioning the effects of the recession
The Nigerian government will borrow more from abroad to meet up its obligations as the country slide into recession officially yesterday, August 31.
The Muhammadu Buhari’s government has mapped out a three-year plan to source for funds abroad in order to cushion the effects of the recession.
President Buhari is presiding over a battered economy
Figures released by the National Bureau of Statistics (NBS) yesterday showed that Nigeria had officially gone into recession.
The NBS figures showed that in the Gross Domestic Product (GDP) for the second quarter of 2016, Nigeria’s economy contracted by 2.06 percent.
The country’s economy shrank by 0.36 percent to hit its lowest point in 25 years. The second quarter report makes Nigeria’s economy the worst in three decades.
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Minister of finance, Kemi Adeosun told State House correspondents that the government would look for soft loans in addition to tapping the commercial Eurobond market.
The government is already in the process of appointing two lead managers and a financial adviser to organize the issuance of $1 billion of Eurobonds this year.
According to the Debt Management Office (DMO), the sale is the first tranche of a $4.5 billion Nigeria Global Medium-Term Notes Issuance Programme that runs through 2018.
The government is also in talks with the Chinese import-export bank China Exim Bank for a $21 billion loan to finance the 2016 budget and develop new infrastructure projects.
The Chinese bank has already granted Nigeria a loan of $1.8bn. President Buhari’s visit to China in April witnessed the Asian giant lending $6 billion to Nigeria.
Two weeks ago, the government obtained a $100 million credit facility from India to solve the niggling problems in the power sector.
The government has stated that it plans to borrow as much as $10 billion from debt markets, with about half of that coming from foreign sources. .
The medium-term borrowing plan which covers 2016-2019, will be sent to the Senate for approval.
READ ALSO: Recession: No cause for alarm, we will come out soon – Kemi Adeosun
Meanwhile, these are hard times for Nigeria’s federal legislature as the dwindling economy has affected the finances of the National Assembly.
According to a recent media report, contractors and suppliers are grumbling over the inability of the management of the National Assembly to liquidate their accumulated debts.
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