Nigeria needs infrastructure development, says AfDB

…promises Nigeria $4.1bn loan

The African Development Bank (AfDB) is set to lend Nigeria a total $4.1 billion over 2016 and 2017, and $10 billion by 2019, its president said on Monday, to help Africa’s biggest economy plug its budget gap and develop its infrastructure.

Akinwumi Adesina said he would go to the pan-African lender’s board next month to seek approval for a first, $1 billion loan to cover this year’s deficit as Nigeria grapples with its first recession in more than 20 years.

“The bank is going to provide in total between 2016/2017 $4.1 billion to Nigeria in various areas. I expect that our portfolio in Nigeria will not decrease — it will actually grow. We expect to invest in Nigeria, by 2019, a total of $10 billion,” Akinwumi said.

Adesina said funds that the AfDB aims to lend over the next two years would be used to develop the power and agriculture sectors in the west African country, aiding a move away from the country’s reliance on oil revenue.

Finance Minister Kemi Adeosun had earlier said the budget support facility would be concessional and carry an interest rate of 1.2 percent.

Meanwhile, the country is also planning to raise between N250 billion and N340 billion in local currency-denominated bonds in the fourth quarter, the Debt Management Office (DMO).

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Nigeria plans to raise between 250 billion naira and 340 billion naira ($794.91 million-$1.08 billion) in local currency-denominated bonds in the fourth quarter, the Debt Management Office (DMO) said on Tuesday.

The debt office said it would auction between 90-120 billion naira worth of bonds maturing in 2021, 70-100 billion naira in the debt maturing in 2026 and 90-120 billion naira worth in the paper maturing in 2036.

In its latest issuance calendar, the debt office said the bonds will be re-opened from previously issued debt. Nigeria had planned to raise between 305-395 billion naira worth of debt in the third quarter but ended up issuing 460 billion naira worth.

Nigeria issues sovereign bonds monthly to fund its budget deficit, support the local bond market and create a benchmark for corporate issuance. Nigeria said it will borrow about 900 billion naira locally to finance part of the 2.2 trillion naira deficits in its 2016 budget.