RECESSION MAY LAST LONGER BECAUSE FG CANNOT PRODUCE NECESSARY DOCUMENTS TO ACCESS LOANS

Hopes of the Nigerian on the street that the recession may be over sooner rather than later may have run into bumps as NASDAQ claims that the international loans the government is pursuing have not yet been considering by the various international financial institutions requested. This is as a result of the inability of the FG to present the required economic reform plans, according to one of the banks and sources close to the matter. 

·         World Bank

The World Bank and the FG have been in talks for over a year now on accessing loans required to drive the infrastructural development of the country and stimulate its economy. FG had the required economic reform plans, according to one of the banks and sources close to the matter.

Till date however, the plans have not yet been submitted and the FG is keeping mum about why as Nigerian finance minister Kemi Adeosun and the World Bank declined to comment. The result is that the World Bank cannot consider a loan yet, says NASDAQ.

·         African Development Bank

The AfDB had last year approved the release of the first tranche of a $1 billion loan to the country but have refused to approve the second tranche due to the inability of the government to produce necessary documents. “We are waiting for the economic policy recovery programme and the policy  framework for that,” AfDB president Akinwumi Adesina told Reuters on the sidelines of the World Economic Forum in Davos, Switzerland.

Considering that the country is depending on about $4 billion loans from the World Bank and other foreign institutions and $1 billion through Eurobonds to plug a yawning budget deficit and fund badly needed infrastructure projects, one would have thought every measure would be in place to ensure swift access of these funds. However, this has not been the case.

The failure to secure the funds, and to present a reform programme, could also deter some investors from Nigeria’s planned $1 billion Eurobonds sale in March.

A Nigerian financial source said the government was working with a consultancy on putting together a package of proposed reforms. The source, who declined to be named as the matter is confidential, did not elaborate.