Nigeria asks for $3.5bn in global emergency loans


Nigeria has asked the World Bank and African Development Bank for $3.5 billion in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices.

The request from the eight-month-old government of President Muhammadu Buhari is intended to help fund a $15 billion deficit in a budget heavy on public spending as the west African country attempts to stimulate a slowing economy and offset the impact of slumping oil revenues.

It comes as concerns grow over the impact of low oil prices on petroleum exporting economies in the developing world. Azerbaijan, which last month imposed capital controls to try and halt a slide in its currency, is in discussions with the World Bank and the International Monetary Fund about emergency assistance.


Nigeria’s economy is Africa’s largest and has been hit hard by the fall in crude prices — oil revenues are expected to fall from 70 per cent of income to just a third this year.

Finance minister Kemi Adeosun told the Financial Times recently that she was planning Nigeria’s first return to bond markets since 2013. But Nigeria’s likely borrowing costs have been rising alongside its budget deficit. A projected deficit of $11bn, or 2.2 per cent of gross domestic product, had already risen to $15bn, or 3 per cent, as a result of the recent turmoil in oil markets.

The $2.5bn loan from the World Bank and a parallel $1bn loan from the ADB, which would enjoy below-market rates, must still be approved by both banks’ boards.
Sumber: CNBC
http://www.cnbc.com/2016/01/31/finan...ncy-loans.html