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President Muhammadu Buhari

Buhari Approves Borrowing from World Bank, China, Japan

Nigeria President, Muhammadu Buhari has approved plans for external borrowing from the World Bank, China and Japan

Nigeria can take on debt from institutions together with the world Bank, African Development Bank, Japan International Cooperation Agency and Import-Export Bank of China, Bloomberg quoted the presidency to have disclosed on Twitter.

This will include “long-term, low-cost” loans with interest rates of 1.25 % and maturities of twenty years, according to the tweets. Details of a Eurobond will be declared “in due course.” the govt is currently awaiting lawmakers to approve the plans, the presidency said.

President Buhari declared a record N6.1 trillion ($19.4 billion) disbursement plan this year to try and stimulate the economy, which shrunk in the 1st 2 quarters as oil revenue plunged. He said he expected the government to raise about $5 billion from the Eurobond market and multilateral and bilateral lenders.

The Debt Management office last month asked banks to place bids by Sept 19 if they wished to manage a $1 billion Eurobond sale. minister of finance, Kemi Adeosun told bond investors in London in June that Nigeria was near securing around $3 billion of funding from the African Development Bank and world Bank.

Nigeria that vies with South Africa as the continent’s biggest economy has issued dollar bonds 2 times, the last time in 2013. Yields on its $500 million of securities due in July 2023 fell eleven basis points to 6.24 % in Lagos, their lowest level since June 2015 and down over 300 basis points since touching a record 9.4% on January 18.

Meanwhile, the amount of trade between Nigeria and China has been calculated to be about $15 billion in 2015, a figure the Chinese consulate General, Chao Xiaoliang, said has dwindled over the last 9 months.

According to Xiaoliang, the rationale for the decline is the current harsh economic situation in Nigeria, adding that going forward; China is aiming to use the just completed G20 Hangzho summit to seek new investment opportunities in Nigeria and Africa at large.

He noted that the trade volume between each country stood at $18.1billion in 2014, but dipped lower the following year which he said was as a result of the sluggish world economy.

The new Chinese consulate throughout his first interactive session with journalists in Lagos, however expressed that Nigeria and other African countries stand to profit from the G20 summit, adding that China has launched a cooperation initiative to support industrialization of Africa and the Least Developed Countries (LCDs).

He also said that China has promoted G20 member states to conduct cooperation to assist LCDs accelerate their industrialization through capacity building, improving infrastructure increasing investment to attain their poverty alleviation and sustainable development goals.

China attaches great importance to develop good relations with African countries based on mutually beneficial cooperation and common development. A prosperous and stable Africa also serves the interests of China likewise as the whole world,” he said.

He added that LCDs and Africa are in pressing need of speeding up the process of industrilisation and improving self-development capability.

He said Nigeria being the largest economy in Africa is saddled with the present challenge of falling price of oil and commodity, maintaining that the G20 summit is of reference significance and would offer some opportunities for Nigeria to deal with its economic challenges.

In his words, “In G20 initiative on supporting industrialisation in Africa and LDCs, it recommends that the G20 group of leading economies promotes inclusive and industrialization and sustainable structural transformation in Africa and LDCs through knowledge-sharing platforms for peer-to-peer learning; policies; the sharing of best practices; measures and guiding tools; multi-stakeholder discussions; involves the G20 to support agriculture and business development.”

We are also looking at deepening, broadening and updating the local knowledge base to encourage industrialisation through trade and deeper regional integration and also to push the new industrial revolution,” he said.

He expressed that China as a trustworthy partner of Africa, will keep its promise made in G20 summit and would always be ready to provide its assistance to and further strengthen China’s mutual beneficial cooperation with Nigeria and other African countries.

The G20 summit has successfully completed, and the legacy it has left will profit the world for a long time. The summit will be a new place to begin for the G20 to embark on a brand new journey. The Chinese government will take the summit as an opportunity to upgrade the cooperation and relations with African countries. i will be able to work with my colleagues to assist the Nigerian government and people enjoy the advantages of the G20 summit,” he assured

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