The Federal Government is seeking for external loans with a total value of USD5.7bn (N2.97tn) in order to ensure financing of infrastructure and other projects listed in the 2015 budget, ThePunch reports. The search for foreign money becomes necessary due to an unexpected oil price drop in the end of 2014 and its negative impact on the economy of Nigeria.
The possible sources for the loan are the World Bank, the African Development Bank, the Islamic Development Bank and China Export-Import Bank.
The information on the borrowing plan was contained in a 28-page document titled ‘The Overview Of The 2015 Budget Proposal’, signed by the Minister of Finance, Dr Ngozi Okonjo-Iweala.
A correspondent of ThePunch had a chance to study its copy and found our the following:
– the debt service to revenue ratio is increased to 22% (19% in the 2014 budget);
– oil production target: 2.27 million barrels per day; a benchmark price = USD65 per barrel;
– exchange rate: 1USD = N165;
– projected aggregate revenue = N3.602tn (N1.918tn oil revenue (53%) + N1.684 non-oil revenue (47%));
– Gross Domestic Product (GDP) growth rate of 5.5 per cent;
– fiscal deficit = N755bn (or 0.79% of GDP); domestic borrowing = N570bn (N571.9bn in 2014);
– expenditure figure = N4.358tn: N412bn for statutory transfers, N943bn for Debt Service, N2.61tn for recurrent expenditure (non-debt) and N634bn for capital expenditure (inclusive of the Subsidy Reinvestment and Empowerment Programme).
In her analysis, as contained in the document, Okonjo-Iweala explained that “as a result of the massive drop in capital spending, the government had decided to augment capital expenditure with external long-term concessional borrowings for infrastructure projects.”
According to the minister, the sum of USD100m (N16.8bn) would be sourced from the World Bank for Clean Energy Technology project; USD800m (N135.4bn) would be obtained from the African Development Bank and the Islamic Development Bank for the East-West Road project, while USD4.8bn (N806.4bn) would be borrowed for the Mambila Hydro Electric Power Project from China Exim Bank.
In addition, the Okonjo-Iweala revealed that the Federal Government had received an invitation from the Chinese government to negotiate a credit of about $12bn for the coastal rail project to be given in six tranches over a 6-year period.
It would be noted that as of the end of September 2014, Nigeria’s overall public debt stock stood at USD69.6bn (approx. 13% of the GDP).
It consists of external debt of USD9.5bn and domestic component of USD60.1bn
The possible sources for the loan are the World Bank, the African Development Bank, the Islamic Development Bank and China Export-Import Bank.
The information on the borrowing plan was contained in a 28-page document titled ‘The Overview Of The 2015 Budget Proposal’, signed by the Minister of Finance, Dr Ngozi Okonjo-Iweala.
A correspondent of ThePunch had a chance to study its copy and found our the following:
– the debt service to revenue ratio is increased to 22% (19% in the 2014 budget);
– oil production target: 2.27 million barrels per day; a benchmark price = USD65 per barrel;
– exchange rate: 1USD = N165;
– projected aggregate revenue = N3.602tn (N1.918tn oil revenue (53%) + N1.684 non-oil revenue (47%));
– Gross Domestic Product (GDP) growth rate of 5.5 per cent;
– fiscal deficit = N755bn (or 0.79% of GDP); domestic borrowing = N570bn (N571.9bn in 2014);
– expenditure figure = N4.358tn: N412bn for statutory transfers, N943bn for Debt Service, N2.61tn for recurrent expenditure (non-debt) and N634bn for capital expenditure (inclusive of the Subsidy Reinvestment and Empowerment Programme).
In her analysis, as contained in the document, Okonjo-Iweala explained that “as a result of the massive drop in capital spending, the government had decided to augment capital expenditure with external long-term concessional borrowings for infrastructure projects.”
According to the minister, the sum of USD100m (N16.8bn) would be sourced from the World Bank for Clean Energy Technology project; USD800m (N135.4bn) would be obtained from the African Development Bank and the Islamic Development Bank for the East-West Road project, while USD4.8bn (N806.4bn) would be borrowed for the Mambila Hydro Electric Power Project from China Exim Bank.
In addition, the Okonjo-Iweala revealed that the Federal Government had received an invitation from the Chinese government to negotiate a credit of about $12bn for the coastal rail project to be given in six tranches over a 6-year period.
It would be noted that as of the end of September 2014, Nigeria’s overall public debt stock stood at USD69.6bn (approx. 13% of the GDP).
It consists of external debt of USD9.5bn and domestic component of USD60.1bn
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