Friday, 2 January 2015

Oil slump: FG may borrow from W’Bank, others


The Federal Government, in a bid to cushion the impact of oil price drop on the nation’s economy, is seeking external loans worth $5.7bn (N2.97tn) from its development partners to finance infrastructure projects contained in the 2015 budget.

The development partners, from whom the loan will be sourced are the World Bank, African Development Bank, Islamic Development Bank and China Export-Import Bank.


The borrowing plan was confirmed by the Minister of Finance, Dr. Ngozi Okonjo-Iweala, in a 28-page document entitled, ‘The overview of the 2015 budget proposal.’

According to the document, the debt service to revenue ratio will increase from 19 per cent in 2014 to 22 per cent in the 2015 budget.

The 2015 budget, which was submitted to both chambers of the National Assembly by the Finance minister, had an oil production target of 2.27 million barrels per day, with a benchmark price of $65 per barrel; and an exchange rate of N165 to a dollar.

The fiscal document is also targeting a projected aggregate revenue of N3.602tn made up of N1.918tn oil revenue and non-oil revenue of N1.684tn.

This, according to analysis, will imply a ratio of 53 per cent oil revenue to 47 per cent non-oil revenue. 

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