2 February 2016

Nigeria: Abuja Seeks U.S. $3.5 Billion From World Bank, AfDB Over Budget Shortfall

Nigeria is seeking $3.5 billion from the World Bank and the Africa Development Bank (AfDB) to finance a shortfall in its 2016 national budget.

The money, in form of emergency loans, is needed to plug deficit in the $39 budget following the tumbling of crude prices.

A $2.5 billion loan from the World Bank and a parallel $1 billion from AfDB are awaiting approvals by the boards of the two institutions.

The World Bank loan is subject to the endorsement of the International Monetary Fund (IMF).

The IMF chief Christine Lagarde had visited Nigeria and offered some economic advice on how to get out of the country's current doldrums.

Ms Lagarde specifically urged Nigeria to stop subsidising petroleum products, a policy it had long insisted on.

The government subsequently announced that it had stopped the subsidies and that market forces would henceforth determine prices of petroleum products.

According to the Minister of Finance, Mrs Kemi Adeosun, the subsidy regime was subject to corruption and fraud and was a drain to the government purse.

President Muhammadu Buhari has however foreclosed suggestions for the devaluation of the naira currency.

The loans Nigeria is seeking are meant to cushion a $15 billion budget deficit, after taking into account other sources of revenue besides oil exports.

The government has already increased the value added tax on luxury goods and also introduced a tax on bank deposits.

Meanwhile, the Minister of State Labour and Employment, Mr James Ocholi, has asked AfDB to accommodate local content in its project implementation activities in Nigeria.

Mr Ocholi was receiving a delegation from the AfDB led by a director of the bank, Mr Pitamber Sunita, on Monday in Abuja.

The minister stressed that one critical area AfDB could be of assistance to Nigeria in its efforts at job creation is in the area of vocational skills and capacity building.

The country, he said, needs AfDB's assistance in the provision of social protection and safety nets, skills development, productivity enhancement, social inclusion, and poverty reduction.

Nigeria

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