By Emma Ujah, Abuja Bureau Chief
Faced with low oil revenue and high demand for foreign exchange, the federal government has taken steps to source $2 billion from the World Bank and the African Development Bank, ADB, to assist in the implementation of its policies and programmes this year.
The nation’s foreign reserve now stands at about $30 billion in an economy that has been facing high dollar demand and low foreign exchange inflow.
She explained that the facility was part of the approved 2012-2015 External Borrowing Plan.
The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, said during an interactive session with journalists in Abuja, yesterday, that the federal government was taking the step in order to strengthen the nation’s currency, among others.
Her words, “We have entered negotiations with international financial institutions— that is specifically, the African Development Bank and World Bank. You know they have some resources for us already programmed, which is in the Borrowing Plan.
“We have asked them to turn these resources into budget support for us We are negotiating for $2 billion that will come in foreign exchange. Remember that the terms of this loan from the ADB are quite reasonable (3-4) per cent compared to what you can get outside, and this is money that they had committed aside for us and we have decided to draw on it, and use it in form of budget support to come in form of foreign exchange.
“We will to get the naira equivalent given to us by the Central Bank. It will come in two tranches. It will bring in the needed foreign exchange that will help our private sector people to have access. So, it will alleviate the situation. It’s something that we are working on.
We are communicating day and night with them. We have to address the needs of manufacturers and others. That is one more thing we are doing and I hope that will help to ameliorate the situation,”
Being a concessionary loan, the minister said that the facility would pose no undue burden on the nation.