FG Seeks New $800m Loan As IMF Warns Of Impending Doom
Princess-Ekwi Ajide Abuja
President Muhammadu Buhari, has written the Senate asking the lawmakers to approve a new loan request of $800million.
Senate President, Ahmad Lawan, confirmed the request during plenary at the upper chambers.
Lawan, who explained that the loan which will be used to scale up National Social Safety Net Programme, disclosed that the loan would be sourced from the World Bank.
Meanwhile, the International Monetary Fund (IMF)’s Deputy Divisional Chief, Wenjie Chen, had warned the federal government of Nigeria that the country’s economy will continue to record new shocks and contractions unless it effects significant reduction in foreign loans.
Chen, who gave the warning in a keynote presentation at the Fund’s regional economic outlook held in Lagos, explained that borrowing costs, high-interest rates and the increasing value of the dollar have continued to put a strain on Nigeria’s economy and that of its Sub-Saharan African counterparts,
The IMF’s Deputy Divisional Chief, said owing to uncertainties surrounding the global economic environment, loans from China as well as other advanced economies to Africa have been on a decline.
Public debt ratio according to Chen, has doubled in the region in the past decade, and debt vulnerabilities of Nigeria and others would continue to increase.
Chen, noted the three main manifestations that many countries are facing in the rise in borrowing costs; include inability to raise funds on the international markets due to shut out of frontier markets in Eurobond markets since the Spring of 2022, rises in price and the cost of living owing to Russia and Ukraine crisis
For many African countries, the cost of servicing debts has also gone up and inflation is still a major concern for many African economies as many countries are still going through recovery after the pandemic according to Chen.
