Eleven days after the Senate approved President Muhammadu Buhari’s request for $22.7 billion loan to finance infrastructure, the Federal Government Monday, March 16, 2020, said it would hold action on the plan, citing what it called current market realities.
The $22.7 billion loan which was to be raised through the international capital market and multilateral institutions is now put on hold due to the “current market reality” in the wake of the outbreak of coronavirus and the sharp drop in global oil prices.
Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed this at a news conference in Abuja.
She said the current realities in the global economic landscape were not favourable for the execution of the borrowing plan at this time, adding that government was no longer willing to go ahead with the debt issuance even if it secured the approval of the lower legislative chamber – the House of Representatives also.
The House of
Representatives last week suspended debate on the matter indefinitely.
Emphasising that current economic realities do not support the option of going
ahead with the exercise, Ahmed said, “The parliament is still doing its work on
the borrowing plan.
“One arm of the parliament has completed theirs and the other arm is still working and it is a process that is controlled by the parliament itself, so we are waiting”.
She added, “we are not going out immediately because the market indication is not in favour of external borrowing at this time. Even if we get approvals we will defer it and watch the market and go out only when the timing is right.”
Ahmed used the opportunity to harp on the need to diversify the economy in order to free the country from the vagaries of volatile oil prices in the international market.