The federal government Thursday said it had approved an external borrowing plan of Low cost, long-term loans (1.25% interest, 20yr tenor)" from the World Bank, African Development Bank, China's Exim Bank and the Japan International Cooperation Agency.
This will not just add to Nigeria’s debt levels, but will burden more the unborn Nigerians likely to repay the huge debt. This comes seven months after the Buhari government denied report that it asked the World Bank and African Development Bank for $3.5bn in emergency loans to fill the growing gap in its budget.
The government said the external loans would be used mainly in the agriculture, power, mining development and healthcare sectors.
A record 6.1-trillion-naira ($19.4-billion) spending plan was announced in this year's federal budget to try to stimulate growth. The Buhari administration's plans to “contain overall fiscal deficit” by emphasising “efficiency and effectiveness in public spending” even as revenue performance was improved seems to have hit a snag.
The effect has been the government gobbling up loans from Eurobond to bilateral loans from China and Japan to finance its ever-expanding deficit, Per Second News gathered. The ministry of petroleum resources under Mr Ibe Kachikwu, continue to miss revenue collection targets.
Per Second News reliably gathered that the loans will help fund the $15bn deficit, which has been deepened by a hefty increase in public spending as the country attempts to stimulate a slowing economy.
- Per Second