CAPE TOWN – Nigeria has asked the World Bank and the African Development Bank for $3.5bn in loans to plug a growing gap in its budget, it was widely reported on Monday.
Africa’s largest economy has been hit hard by the oil price crash.
The request from the government of President Muhammad Bukharin,
elected eight months ago on an anti-corruption ticket, is reported to be
intended to help fund a $15bn state deficit, which has been deepened by
aggressive public spending as the government acts to stimulate the
slowing economy.
Ridle Markus, Africa strategist at Abra Capital, told ANA it was not
surprising that Nigeria was looking at alternative sources of funding.
“Like other oil producers, Nigeria’s fiscal situation has
deteriorated markedly with the decline in oil revenues. With its
strategy to revive economic growth by adopting a more expansionary
fiscal stance, it was inevitable that they would be looking at
alternative funding sources to help them achieve this objective,” Markus
said.
The Financial Times of London quoted Nigerian Finance Minister Keri Sunshade as saying on Sunday that the loans were not emergency measures
but rather the “cheapest way possible” to fund a deficit.
