The Minister of Finance, Mrs. Kemi Adeosun, says Nigeria is exploring local and domestic sources to fund the N1.8tn deficit in the 2016 budget currently undergoing approval at the National Assembly.
She, however, maintained that Nigeria had yet to submit any formal application for loans with any of the multilateral institutions.
The minister said the Federal Government was looking at borrowing from multilateral agencies such as the World Bank and African Development Bank and export credit agencies like the China Exim Bank due to their concessionary interest rates.
Adeosun was reacting to a report by the Financial Times suggesting that Nigeria had applied for emergency loans from the World Bank and the AfDB.
A statement by the Special Adviser on Media Matters, Mr. Festus Akanbi, quoted the minister as saying, “The truth is that Nigeria, as part of the plans to fund the 2016 budget currently undergoing the approval process of the National Assembly, has indicated an intention to borrow N1.8tn principally for investment in capital projects to stimulate the economy.”
According to her, the option of the World Bank is to ensure an optimum financing structure, noting that the 2016 budget is part of the medium-term economic framework of the Federal government, which the World Bank is aware of.
She said the need to invest in infrastructure to stimulate the economy and the long-term payback period of capital projects demanded that lowest cost of fund be obtained.
“Nigeria, as a member of World Bank group, is entitled to access available funds like every member-country,” the minister stressed.
“No application for loans has been made; we are simply discussing options for funding 2016 budget,” she added.
As part of its Medium-Term Expenditure Framework and Fiscal Strategy, the Federal Government had indicated the plan to stimulate the economy and achieve a real GDP growth rate of 4.2 per cent in 2017.
Meanwhile, the Federal Government on Monday allayed fears about the implementation of the 2016 budget as a result of the drop in oil prices, stating that it would fully fund the N1.8tn capital projects contained in the fiscal document using innovative methods.
The Minister of Budget and National al Planning, Senator Udo Udoma, stated this during a meeting with members of the Senate Committee on National Planning and Economic Affairs.
The committee led by its Chairman, Senator Rabiu Kwankwaso, was on a familiarisation visit to the ministry.
Udoma said the global drop in oil prices from $100 to about $30 per barrel had adversely affected the country’s economy, noting that the era of depending solely on oil revenues to fund budgets was over.
He said the current administration was mindful of this development when it pegged the oil benchmark at $38 per barrel.
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