Nige­ria bor­rows $900m from Chi­nese bank

The Pak Banker - - Company& -

ABUJA: Nige­ria has borr owed $ 900 mil­lion f r om Ex­port-Im­port Bank of China ( China Ex­im­bank) t o f und rail­way and se­cu­rity projects, the coun­try's fi­nance min­is­ter said.

The move comes de­spite con­cerns raised by Nige­ria's cen­tral bank gover­nor over the rapid ex­pan­sion of pub­lic bor­row­ing and govern­ment spend­ing, which is keep­ing in­fla­tion high in sub-Sa­ha­ran Africa's sec­ond-largest econ­omy.

Nige­ria's bud­get deficit is ex­pected to widen to 6.1 per­cent this year, it has spent bil­lions of dol­lars of its wind­fall oil sav­ings, and its for­eign re­serves have fallen 20 per­cent from a year ago.

Africa's most pop­u­lous nation will head to the polls for pres­i­den­tial, par­lia­men­tary and state gov­er­nor­ship elec­tions next April and the govern­ment i s set­ting i n place plans to im­prove the poor state of the coun­try's in­fra­struc­ture.

"We have just ob­tained a loan of 900 mil­lion dol­lars from the Ex­im­bank of China to fi­nance two ma­jor projects, which are the Abuja to Kaduna rail­way project and the na­tional pub­lic se­cu­rity com­mu­ni­cat i ons project," Oluse­gun Aganga said.

"500 mil­lion dol­lars is for the rail project while 400 mil­lion is for the ex­e­cu­tion of the se­cu­rity com­mu­ni­ca­tion project," he added.

Aganga said the loan was for 20 years with a 2.5 per­cent i nter­est r ate, al­though he hopes the se­cu­rity com­mu­ni­ca­tions sys­tem will pro­duce cash flow and the loan will be paid off within five to seven years.

Pres­i­dent Good­luck Jonathan pre­sented the 2011 bud­get pro­posal to par­lia­ment this month, propos­ing a cut in 2011 spend­ing al­though re­cur­rent ex­pen­di­ture --the cost of run­ning govt re­mains high un­der the plans. -PB News

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