NewsWest AfricaNigeria "cannot borrow anymore", says finance minister


Posted on Tuesday, 11 July 2017 15:19

Nigeria "cannot borrow anymore", says finance minister

By Reuters

In this photo taken on  June. 20, 2016, a trader counts US Dollars inside a shop in Lagos, Nigeria. Photo: Sunday Alamba/AP/SIPANigeria must not borrow more to fund its budget and should instead raise money it needs by other means, the country's finance minister said on Tuesday, calling into question planned foreign loans of $2 billion from lenders like the World Bank.


Africa's largest economy is in its first recession in 25 years, and had planned to borrow extensively from overseas to fund a record budget aimed at helping the country spend its way out of its economic doldrums.

But plans for lenders like the World Bank and African Development Bank to loan at least $2 bn to Nigeria have been stalled for over a year as international organisations' frustrations mounted at the country's refusal to impose key fiscal reforms such as allowing its foreign exchange rate to float freely.

Finance Minister Kemi Adeosun's comments, made while speaking at a business forum in the capital of Abuja, suggest that Nigeria will no longer seek such loans, or an additional $1.5 bn it had planned to raise from international debt markets.

Generate funds domestically

"We cannot borrow anymore, we just have to generate funds domestically enough to fund our budget. Mobilize revenue to fund the necessary budget increase," she said.

In May, the head of Nigeria's budget office said the country has a shortfall of $7.5 bn for its 2017 budget expenditure, and said that would be addressed with $3.5 bn from the aforementioned loans and debt.

The government also planned to raise $4 bn from the local debt market, he said at the time.

Nigeria's presidency signed off on its record $24.39 bn budget for 2017 in June, after numerous delays. Officialsusa

The plan projects a deficit of 2.21 trillion naira, implying a deficit equivalent to 2.18% of Nigerian gross domestic product.


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