The Federal Government has said it was looking the way of the International Monetary Fund, IMF, and the World Bank for some of its external borrowings to boost the economy out of recession.

This came as the Debt Management Office, DMO, said, yesterday, it had raised the N1.18 trillion, which is the domestic component of the 2016 budgeted borrowing.

According to the government, both institutions have some “concessionary terms” attached to borrowing packages.

A statement signed by Media Adviser to the Minister of Budget and National Planning, James Akpandem, quoted the Minister, Senator Udo Udoma, as stating this at a meeting with the Assistant Secretary for Multilateral Affairs of the Trade and Policy Department at the French Treasury, Mr Guillaume Chabert, in Abuja.
Udoma re-emphasised that Nigeria’s borrowings were solely to fund infrastructure projects, adding that “the stimulative effect of investing in infrastructure was enormous and was the surest way of setting the country on the path of growth and sustainable development.”


The minister told the Assistant Secretary, who was accompanied by the French Ambassador to Nigeria, Mr Denys Gauer, that the Federal Government is working on a National Economic Recovery and Growth Plan, which is tailored to move the country’s economy out of recession and set it on a growth path.
“Our plan is that we should be able, within that plan period (2017– 2020), to achieve not less than 7% growth.
Plugging leakages
“For one to get out of economic recession, we will need to harness resources by plugging revenue leakages and by looking at new revenue sources in order to generate the resources required to spend our way out of recession, particularly focused on infrastructure,” he added.
The minister explained that while government was exploring other means of generating revenue internally, “we will need to borrow, part of which has to be sourced internationally from sources that can give concessionary terms, like the International Monetary Fund, IMF, and World Bank.
“We know we need to look at upgrading our oil revenue in order to generate the resources to spend our way out of dependence on oil; which means we have to focus our attention on reducing the disruptions in the Niger Delta, so that we can get our production back to a minimum of 2.2 million barrels per day. That is the fastest way to generate resources.”
He pointed out that government alone could not do it, saying that was the reason government emphasised on creation of an enabling environment for effective private sector participation in growing the economy.
He said the government was also going into partnership with the private sector in critical areas of infrastructural provision and concessioning.
He said: “Our intention is to make the private sector to lead the way in social housing. We will kick-start the process and intend to make some provision for it in the 2017 Budget. Then we are also looking at manufacturing.

‘’One of the ways is by developing export processing zones where we will have all the required infrastructure including power, rail and security, to encourage manufacturers to relocate to Nigeria.
“We want to make sure that the growth will be an inclusive one. In the past, we used to have growth that was not inclusive. We were growing but poverty was increasing. We want to make sure that the growth is inclusive. One of the ways is to give preference to labour intensive activities to create jobs, which is the fastest way to reduce poverty. In addition to that, we will continue with our social intervention projects.”
The Assistant Secretary, Mr Chabert, while appreciating the economic challenges the country was currently facing, said the French government would be willing to support Nigeria surmount the challenges.
“It is in our interest that Nigeria succeeds,’’ Chabert said, promising to make some input into the country’s economic plan once the framework was made available.

Meanwhile, the Debt Management Office (DMO) has raised the N1.18 trillion which is the domestic component of the 2016 budgeted borrowing.
Director-General of the DMO, Dr Abraham Nwankwo, disclosed this while receiving some senators on oversight visit to his office in Abuja yesterday.
He said that the balance of N635 billion in the 2016 borrowing plan would come from the African Development Bank, AfDB, which had pledged $1 billion out of which $600 million had been released, as well as other sources.
Nwankwo admitted that in spite of the effort of the federal government to secure the rest, it was having challenges in that regard.
He said government “can fall back on domestic borrowing”, adding that the “DMO is working to see that the $1 billion Eurobond is mobilised by second quarter of 2017.”

The federal government, he said, had been servicing its debt as at when due and that it had paid N1. 09 trillion of the debt service obligation for the year.
“Nigeria is in a very strong position to service its debts because of our debt sustainability analysis which ensures that we make sure we do not go beyond the threshold of borrowing and to avoid unsustainable debt. We will build a sustainable economy in the next 3-5 years.

“The $30 billion loan will be borrowed over a three year period not at once. Drawdown of the loan will be done based on the progress of the work and it is essentially for infrastructure because we don’t have revenue at hand to provide infrastructure.”
The Chairman, Senate Committee on Local and Foreign Debts, Sen. Shehu Sani, who led the team, charged the DMO to be effective in the management of the nation’s debt.

According to him, the legislature “will henceforth pay attention to the agreement on terms and conditions for loans obtained by government to forestall a situation where Nigerians are unnecessarily shortchanged. “A casual observation of construction sites of projects funded from EXIM Bank of China reveals that only foreigners are the engineers, architects and other professionals. Nigerians are only engaged as unskilled workers. This situation is unacceptable. Such agreement must be in tandem with our laws and should serve our collective interest ultimately.”

Atiku2019:
Confused Federal Government

ivandragon:
government should borrow but split the loan into 3 to make it manageable & easier to track.
however, those who continue to refer to GEJ's borrowings seem not to understand the dynamics & variables involved in economic loans & credit facilities.
some of the most indebted countries today include Japan, US, Belgium, Spain, France & Singapore. these are rich nations that continue to borrow to meet certain needs.
at the other spectrum, you also have countries like Bhutan, Jamaica, Cape Verde & of course, Greece.
as a matter of fact, the US between 2012-2014, despite reducing its oil imports drastically, still took loans of between $1.2t to $2t (yes, TRILLION) within that period.
so, it is elementary & shows a high level of ignorance to just give a blanket condemnation to the loans taken by GEJ as it would be unfair to deny PMB the loans needed to take us out of recession.
the difference now is that one knew what he needed the loan for while the other has no idea what he is going to use the loan for.
& before those foot soldiers of PMB attack me, I simply refer you to what the Minister of Sports said yesterday... so incompetence breeds incompetence.

SillyMods:
Get the loan and use judiciously to improve the country.

Those crying were blind and deaf when the Otuoke docile thing was borrowing left and right despite earning humongously from crude. And that was a time we had no business borrowing.

tit:
See as buhari is making a yeye of hisself and the goant of Africa!

3rdavefarms:
Collect that money and credit all out account ...

buJu234:
where are the SW media group NL division; that said in the beginning of this year that Buhari/APC govt. will never burrow from world Bank/IMF?

SillyMods:
Get the loan and use judiciously to improve the country.

Those crying were blind and deaf when the Otuoke docile thing was borrowing left and right despite earning humongously from crude. And that was a time we had no business borrowing.

sunnyt1:


Do u honestly think such loans wil be used judiciously to improve the country? its so shocking that some people stil beliv in this country

WOCKHARDI:
Y

Boleyndynasty2:
Thought I heard them say they won't accept loans from IMF?

Kingbuhari:
Buhari’s
current economic policies are
similar to those he promulgated
during the military regime he led
in the 1980s, Buhari’s
“archaic” and “opaque” economic
principles are not only
encouraging massive corruption
and abuse of power, but also
hurting the poor they were
intended to help. “What did not work in 1984 cannot
possibly be a solution in a global
economy that’s much more
integrated.”

abumeinben:



We aren't against borrowing or loans bruh, the question is why would you borrow an amount equivalent to your external reserve? It tells me after a successful loan transaction, our reserve would be $0.

And the 25 year payback period is totally out of context. That means the next 6 administrations would lead to service loans. Too bad.


He should get load for at most 3 years. That's manageable.