× Digital News Videos Health & Science Opinion Education Columnists Lifestyle Cartoons Moi Cabinets Kibaki Cabinets Arts & Culture Podcasts E-Paper Tributes Lifestyle & Entertainment Nairobian Entertainment Eve Woman TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×
Watch The Tokyo Olympics 2020 live online

Nigeria's Sh162 billion World Bank loan delayed over reforms, say sources

NEWS
By Reuters | August 19th 2020

The World Bank is unlikely to approve a much-needed USD1.5 billion for Nigeria in August as planned due to concerns over desired reforms, three sources familiar with the talks told Reuters.

A man carries Nigerian naira banknotes at a livestock market in Abuja, Nigeria July 29, 2020. [REUTERS]

A delay in financing from multilateral lenders could leave Africa’s biggest economy and top oil producer, battered by low crude prices, unable to fully finance a record 10.8 trillion naira (USD28.35 billion) budget. The central bank has said Nigeria’s balance of payments gap this year will be USD14 billion.

The World Bank, which has said Nigeria could be heading toward its greatest fiscal crisis in 40 years, had aimed to bring the loan to its board for approval this month, but the sources said negotiations over what Nigeria will do to secure it were incomplete.

“They are not convinced about the reforms,” a source close to the government said. All three sources declined to be named due to the sensitivity of the negotiations. The source added that the currency was the core issue.

World Bank loans are often contingent upon reforms. It has not outlined any demands, but said previously that it was “recommending” a more unified, flexible exchange rate. Fuel subsidies and electricity tariffs are also being discussed.

Another banking source said the loan could now not be approved until October.

Nigeria’s finance ministry directed queries to the World Bank. In a statement, the lender said discussions were at an advanced stage, but confirmed that it had not presented the loan to its board.

“Of particular importance are the steps the government is taking to marshal the needed fiscal resources for a pro-poor response to the crisis and undertake the reforms that will help ensure a robust recovery,” the statement said.

Nigeria’s policy of supporting the naira has become more costly since the oil price slide, as it relies on oil for 90% of its foreign exchange. It has devalued the naira twice this year, but the sources said that was not enough for the World Bank, which wanted fuller reform of the naira policy.

Nigeria also said it had eliminated fuel subsidies through a “floating” price cap, but two of the sources said the World Bank felt the mechanism was not sufficiently transparent.

(USD1 = 381.00 naira)

Share this story
Daddy's Girl: Journey on being raised by single father
He says she will tell her own story. He wants to tell his, and that of his daughter.
Why Kenyan boxers are winning medals once again
The BFK led by President Anthony ‘Jamal’ Ombok was elected into the office in 2019 and has since...

.
RECOMMENDED NEWS

Feedback