Nigeria, Angola seek World Bank aid
LAGOS: Africa’s two biggest oil producers, Nigeria and Angola, are in talks with the World Bank about support to help cope with low crude prices, weakening currencies and strained public finances.
Nigeria had held exploratory talks with the World Bank on borrowing to help fund a record budget but had not applied for any emergency loans, Finance Minister Kemi Adeo sun said on Sunday.
Angola also held talks with the World Bank between January 25-29 about securing funding support in a deal that would see Africa’s second-biggest oil producer implement unspecified reforms, the state news agency reported.
The World Bank and other institutions like the International Monetary Fund have recommended that Nigeria and Angola devalue their currencies, which both trade officially at huge premiums to the secondary market.
Devaluations could form part of loan deals, banking sources said yesterday. Nigerian President Muhammadu Buhari is against devaluing the naira.
The naira trades at around 197 against the dollar officially, compared to street rates as weak as 305, while Angola’s kwanza is worth 155/$ but changes hands at more than 400 against the greenback on the secondary market.
Nigeria is planning to borrow as much as $5 billion (R80bn) to help fund a budget deficit due to a slump in vital oil revenues, of which $4bn might come from international institutions and the rest from Eurobonds, Adeo sun had said last month.
“We have held exploratory talks with the World Bank. We have not applied for emergency loans,” she said on Sunday.
Borrowing from international institutions such as the World Bank would be a cost-effective way to raise money to fund the increased capital expenditure in this year’s budget, she said.
The Financial Times had earlier reported that the nation had asked the World Bank and the African Development Bank for $ 3.5bn in emergency loans.
In a statement, Adeo sun’s ministry also said Africa’s biggest economy was looking at “options” to borrow from the African Development Bank and export credit agencies such as China Exim Bank due to their concessionary rates of interest”.
Nigeria expects a budget deficit of 3 trillion naira this year, up from the 2.2 trillion previously estimated, as a slump in oil revenues has eroded public finances and hit its currency. – Reuters
WE HAVE HELD EXPLORATORY TALKS WITH THE WORLD BANK. WE HAVE NOT APPLIED FOR EMERGENCY LOANS