The African
Development Bank has called off a loan to Nigeria that would have helped fund
the country's budget, instead redirecting the money to specific projects, a
vice president at the lender said on Monday.
The African Development Bank had been in talks with Nigeria for around a
year to release the second, $400 million tranche of a $1 billion loan to shore
up its budget for 2017, as the government tried to reinvigorate its stagnant
economy with heavy spending.
But Nigeria refused to meet the terms of international lenders, which
also included the World Bank, to enact various reforms, including allowing its
currency, the naira, to float freely on the foreign exchange market.
Rather than loan Nigeria money to fund its budget, the African
Development Bank is likely to take at least some of that money and "put it
directly into projects," Amadou Hott, African Development Bank vice
president for power, energy, climate change and green growth, told Reuters in
an interview during a Nordic-African business conference in Oslo.
Because prices for oil, on which Nigeria's government relies for about
two-thirds of its revenues, have risen and the naira-dollar exchange rate has
improved, the country is relying less than expected on external borrowing, Hott
said.
No one from the Nigerian finance ministry was immediately available to
comment.
Nigeria's 2017 budget, 7.44 trillion naira, is just one in a series of
record budgets that the government has faced obstacles funding, pushing it to
seek loans from overseas.
In late 2016, the AfDB agreed to lend Nigeria a first tranche of $600
million out of $1 billion. But negotiations over economic reform later bogged
down, blocking attempts to secure the second tranche of $400 million, sources
told Reuters then.
Now, AfDB's loans will be more targeted, Hott said.
"It's hundreds of millions of dollars, just in one go, that we were
supposed to provide in budget support, but we will move into real projects ...
" he said.
Earlier this month, the head of Nigeria's Debt Management Office said
the country is still in talks with the World Bank for a $1.6 billion loan,
which will help plug part of an expected $7.5 billion deficit for 2017.
The administration is also trying to restructure its debt to move away
from high-interest, naira-denominated loans and towards dollar loans, which
carry lower rates.
Source: VOA News
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