with agency report
07 April 2016, Sweetcrude, Abuja – President Muhammadu Buhari will sign a loan deal with China during a visit next week as the Federal Government seeks funds to finance the over N2 trillion budget deficit.
The falling price of crude oil in the international market has greatly impaired the country’s ability to fund its budget, which was passed last week by the National Assembly, as well as run other functions of government.
Government officials would not reveal how much the loan would be, but note that it is expected to help the government to finance badly-needed infrastructure projects.
In February, financial and government sources said the loan could be as high a $2bn but officials have not provided an update since then.
Speaking to a news agency, the Special Adviser to the President on Media, Mr. Femi Adesina, said, “I can’t tell you how much until the day the loan will be signed. Both countries will also be signing some bilateral agreements to strengthen their relationship; that is all I can say now.”
The economy has been hit hard by a slump in oil prices, and the Federal Government has been in talks with China’s Export-Import Bank for a loan for months.
A financial source further said the loan would fund Chinese firms’ infrastructure projects in Nigeria, including the government’s effort to modernise its rail transport system, and investments in power, among others.
The Federal Government has said it wants to raise about $5bn abroad to cover part of its 2016 budget deficit, which could be as high as N3tn ($15bn).