The Nigerian government has been experiencing setbacks in funding its 2017 budget as it seeks to obtain loans from international lenders. The President of the African Development Bank (AfDB), Adewunmi Adesina, said on the sidelines of the World Economic Forum that the AfDB would not release the second tranche of Nigeria’s $1 billion loan until it receives the country’s economic reform plans.
Nigeria: AfDB will not release the second tranche of Nigeria’s US$1bn loan until it’s received an economic recovery plan.
— RMB Global Markets (@RMB_GM) January 18, 2017
The development finance institution paid out $600 million of the loan in November, but it has insisted that it will not issue the remaining part until it receives a recovery plan by the Nigerian government.
“We are waiting for the economic policy recovery programme and the policy framework for that,” said Mr Adesina. The AfDB President though did not mention whether Nigeria had surpassed their submission deadline.
In December, the Presidency announced that it has developed an economic recovery and growth plan (ERGP). During President Buhari’s New Year message, he stated that the plan was anchored on optimising the use of local content and empowering local businesses. The Vice President, Yemi Osinbajo, reaffirmed the completion of the recovery plan yesterday during a press conference in the World economic forum.
The plan stands as a positive development for Nigeria, which has experienced three-quarters of negative growth. However, the government has stalled the demands for a preview of the plan as the details of the plan is yet to be disclosed to Nigerians and the international community.
The World Bank and International Monetary Fund (IMF) have predicted that Nigeria will escape recession in 2017 but the perception portrayed by the government is otherwise. The Nigerian government urgently need to reveal the roadmap towards their projected growth.
The Nigerian 2017 budget reflects that the budget deficit stands at 2.2 trillion naira ($6.99 billion). This indicates that the Nigerian government would have to reach out to local and international lenders to fund the gap.
The government is issuing a $1 billion Eurobond, which should be completed by March this year. There are also reports that the Nigerian government is in talks for a loan from the World Bank and China, however, there are no indications by both lenders of their requirement of a recovery plan.
At the end of 2016, Nigerians took their concern to social media platforms about the government’s delay in unveiling the economic recovery. The Presidency had disclosed they would unveil it in December but the wait continues.
It’s after 6 in Lagos, Nigeria
Where is the Economic Recovery Plan Buhari promised to Unveil in December pic.twitter.com/9IQt1X8mqZ
— IKECHUKWU (@iykimo) December 30, 2016
@MystiqueEstell1 @PrinceWene @iykimo @akaebube lol…. Till Jesus comes
— Dayveed (@Veed69) December 31, 2016
The non-disclosure of the ERGP poses a great concern to Nigerians because it is believed that the plan was developed on the basis of the 2017 budget. If the plan is therefore yet to be developed, what then is the focus of Nigeria’s budget and the government’s strategy to rescue the country from this ailing situation?
