A delay in financing from multilateral lenders could leave Africa's biggest economy and top oil producer, battered by low crude prices, unable to fully finance a record 10.8 trillion naira ($28.35 billion) budget. The central bank has said Nigeria's balance of payments gap this year will be $14 billion.
The World Bank, which has said Nigeria could be heading toward its greatest fiscal crisis in 40 years, had aimed to bring the loan to its board for approval this month, but the sources said negotiations over what Nigeria will do to secure it were incomplete.
"They are not convinced about the reforms," a source close to the government said. All three sources declined to be named due to the sensitivity of the negotiations. The source added that the currency was the core issue.
World Bank loans are often contingent upon reforms. It has not outlined any demands, but said previously that it was "recommending" a more unified, flexible exchange rate. Fuel subsidies and electricity tariffs are also being discussed.
Another banking source said the loan could now not be approved until October.
Nigeria's finance ministry directed queries to the World Bank. In a statement, the lender said discussions were at an advanced stage, but confirmed that it had not presented the loan to its board.
"Of particular importance are the steps the government is taking to marshal the needed fiscal resources for a pro-poor response to the crisis and undertake the reforms that will help ensure a robust recovery," the statement said.
Nigeria's policy of supporting the naira has become more costly since the oil price slide, as it relies on oil for 90% of its foreign exchange. It has devalued the naira twice this year, but the sources said that was not enough for the World Bank, which wanted fuller reform of the naira policy.
Nigeria also said it had eliminated fuel subsidies through a "floating" price cap, but two of the sources said the World Bank felt the mechanism was not sufficiently transparent.
from yahoo news.
(Reporting by Chijioke Ohuocha in Abuja and Libby George in Lagos; Additional reporting by Paul Carsten in Abuja; Editing by Alexis Akwagyiram and Catherine Evans)
Aiit
ReplyDeleteWhich kind reforms? I pray that loan is not approved. They only think of themselves.
ReplyDeleteExactly
DeleteThat's my prayer too.
WICKED LEADERS😢
smh...
ReplyDeleteNa wa
ReplyDeleteCant they just print out money and share round ?
I dn tire o
D cost to print money is more dan d actual money itself.example it cost more dan 10 naira to print a 10 naira note
DeleteI hope they dont get it sef,what do we even need the loan for???
ReplyDeleteThey should go and use Abacha's loots and stop all these borrowings.
ReplyDeleteOK ooo
ReplyDeleteHmm, word bank please don't give them o, I think you guys can see what our government are doing with money, ndcc scam has been swept under carpet, if you give them this, it will end up in buhari and his cohorts account o.na beg we dey beg ,no give them o
ReplyDeleteMobilize on SM and ask world bank to demand exactly what they will spend it on or deny it. SM is where your power is, use it en masse and these morons will reduce the stealing and bring out their loot from GP storage tank instead of embezzling more! You can get the names of world bank officials online. I once messaged the oga of a top 3 bank here, a massive Fortune 500 corp when my branch oga flagged my business account of many years which has never been used for any other stuff, by the second day, 3 of the oga patapatas, svps from the HQ, were apologizing to me! Where did I get oga no? SM. He read my message and saw that my business account was flagged wrongly as its a healthcare practice that is highly regulated down to the software to use. They were apologizing frantically after righting the wrong. Use SM to block their chop chop loan!
ReplyDelete