Less than two months after the National Assembly rejected the celebrated $30bn loan request by the federal government on grounds of lack of necessary explanatory note on how and why the loan will be used and repaid, another nearly completed loan process in the US has suffered the same fate of poor diligent packaging by the economic team.
Reuters reports that the apex government has been in loan talks with the World Bank for a year. It had told the lender it would present its proposed reforms to make the economy more resilient and attractive to investment by the end of December, according to Western diplomats and a Nigerian official who declined to be named as they are not authorised to speak publicly.
But this has not happened and as a result of the delay, which the government has not explained, the Washington-based bank has not been able to consider a loan yet, according to the sources.
The Minister of Finance, Mrs. Kemi Adeosun, and the World Bank declined to comment, Reuters reported.
The Director of Press, Ministry of Finance, Mr. Salis Nai-nna, said he could not comment immediately on the matter when contacted, but the President, African Development Bank, Dr. Akinwumi Adesina, told Reuters on the sidelines of the World Economic Forum in Davos, Switzerland on Tuesday that the AfDB was holding back the second tranche of $1bn loan for Nigeria because the country had yet to submit its economic recovery plan to the lender.
The former Minister of Agriculture said “We are waiting for the economic policy recovery programme and the policy framework for that,” Adesina said, without specifying when the AfDB had expected to receive the reform plans.
It would be recalled that the Federal Government is seeking to borrow $4bn in total from the World Bank and other foreign institutions, and $1bn through Eurobonds to plug a yawning budget deficit and fund badly needed infrastructure projects.
As at press time, it was hard to confirm if the government has not submitted reform plans to the international lenders.
Budget analysts say lack of access to loans has a hand in driving the 2016 national budget to record deficit, but the government is making efforts to avoid the same fate, using still, wrong approach and packaging.
The failure to secure the funds, and to present a reform programme, could also deter some investors from Nigeria’s planned $1bn Eurobonds sale in March.
Because of incessant failure to loan requests traced to poor request packaging, there are indications that government has resorted to outsourcing the service whom a number of people collect salaries for at the presidency.
Currently, the Federal Government needs money to help plug a budget deficit of N2.2tn ($7bn) for 2016 and to help fund a record budget of N7.3tn for 2017, which is aimed at stimulating the economy.
