Nigerian Finance Minister Kemi Adeosun plans to travel to China next week to negotiate a loan of up to $2 billion to cover part of the 2016 budget deficit, Reuters reports, citing a Nigerian government official.
“The finance minister, in the company of the central bank governor, is scheduled to be in China sometime next week to conclude negotiations on the $2 billion loan,” the official told Reuters, asking not to be named.
Government sources also said the country has shelved its Eurobond sale plans. But the minister has denied this.
“The Eurobond is still very much on,” she told Bloomberg by phone on Thursday.
Mrs Adeosun said a non-deal roadshow was likely to start in March. Ahead of this, the finance ministry is considering banks to pick the ones that would arrange the show aimed at generating excitement and interest in the upcoming bond sale.
Nigeria also plans to raise funds from the Export-Import Bank of China, just as it continues discussions with the World Bank for a $2.5 billion loan and the African Development Bank, for a for $1 billion funding.
The country, whose economy is Africa’s largest is suffering its worst economic crisis for decades. It plans to raise about $5 billion abroad to shore up its budget deficit projected to hit N3 trillion ($15 billion) as it increases capital spending despite dwindling government revenues caused by the slump in global oil prices.
The dwindling export revenues has also affected Nigeria’s currency. The naira’s has lost almost half of its value over the last one year as the dollar strengthens. Calls for devaluation have been ignored by the government which claims it will affect the poor Nigerians. The naira exchanged for 312 to a dollar yesterday on the parallel while the official rate was held at N197 to a dollar on Tuesday. The huge difference between the two rates gives an insight into how much value the naira could lose in future. With the official value of the naira apparently not its true value, investors are wary of throwing money in the country. But the Eurobond sale will go on, and a non-deal roadshow could start in weeks.