FG seeks $1.5bn loans to shore up naira, budget

Nigeria has requested $1.5bn aid from the World Bank to tackle the severe dollar shortage contributing to the decline of the naira.

“We’re hoping to get $1bn or $1.5bn from the World Bank” for budgetary support, Finance Minister Wale Edun said Wednesday to Bloomberg.

According to the minister, Africa’s largest economy may also issue a Eurobond in late 2024, adding that with the current economic reforms, the country deserves support.

Eurobonds, denominated in foreign currencies, offer Nigeria a mechanism to navigate its financial landscape amidst challenging economic conditions.

The minister said, “It is a matter of discussion at the moment, but we think we will get the support because we are continuing with our reforms.”

Nigeria has issued Eurobonds in the past to raise debt to fund infrastructure and boost its economy

In 2022, Nigeria entered the international debt markets with a $1.25bn Eurobond issuance, marking its eighth venture into this financial arena, according to the Debt Management Office.

Subsequently, in the following year, the country redeemed a $500m Eurobond issued in July 2013 as part of a dual-tranche of $1bn, held for a tenor of ten years at a coupon of 6.375 per cent per annum.

During a press conference in October 2023, at the World Bank/International Monetary Fund Annual meeting in Marrakech, Morocco, the minister mentioned that the $1.5bn World Bank loan would be coming with zero interest rate.

Nigeria is currently battling with about N87tn debt, which the International Monetary Fund said was “manageable,” but noted that the interest payment was high for the country.



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