The Nigerian government is set to secure a new $2.2 billion loan with single-digit interest rates from the World Bank.
Finance Minister Wale Edu who announced this information during a press briefing at the World Bank/International Monetary Fund Spring meeting in Washington DC, United States, stated that the federal government is expected to receive another budget support loan from the African Development Bank (AfDB) in the upcoming weeks.
Edun outlined various sources of international funding for the Nigerian economy, including diaspora remittances, foreign portfolio investments, and support from the World Bank and other international development partners.
“We have recently qualified for approval by the World Bank’s Board of Directors for a total package of $2.25 billion, representing what can be considered the closest to a grant, with virtually no repayment obligations for 10-20 years and at a nominal 1% interest rate,” he stated.
“In addition to this, we are in discussions with the African Development Bank (AfDB) for similar budgetary support, along with ongoing negotiations with foreign direct investors across various sectors.”
Edun also highlighted the issuance of dollar-denominated securities aimed at attracting forex inflows from Nigerians in the diaspora and those with foreign-denominated savings in Nigeria as another strategy to bolster the country’s foreign exchange reserves.
Moreover, the minister underscored the fiscal measures being implemented to complement recent monetary policy reforms initiated by the Central Bank of Nigeria.
Meanwhile, the development might increase Nigeria’s total public debt which currently stands at N87.91 trillion, according to data from the Debt Management Office (DMO).
The last update from the DMO revealed that marks 0.61 per cent increase from the June 2023 figure of N87.38 trillion.
The debt statistics reveal the combined domestic and external debts of the federal government, the 36 states, and the Federal Capital Territory, equivalent to $114.35 billion as of 30 September.
The debt figure is attributed to a decrease in the nation’s external debt, dropping from $43.16 billion in June to $41.59 billion in September. However, there was a moderate increase of N1.80 trillion in domestic debt.
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