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October 31, 2017 at 10:59AM
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Kess Ewubare
- The IMF faults federal government's proposed borrowing plan
- Kemi Adeosun, the finance minister, says more than half of the recent loan request by the federal government was to refinance loans taken by former president Goodluck Jonathan's administration
The International Monetary Fund (IMF) has warned that the federal government proposed borrowing plan could create exchange rate risks for the Nigerian economy.
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Vanguard reports that the IMF’s Africa department director, Abebe Selassie, gave the warning on Monday, October 30, when speaking on the government plans to issue $5.5 billion debt instrument by the end of this year to refinance existing domestic debt.
“IMF understands the authorities’ needs to rebalance its portfolio of domestic to foreign debt. Such a shift would however make the economy more vulnerable to exchange rate depreciation," Abebe Selassie was quoted by Bloomberg as saying.
Nigeria’s foreign debts debt profile is expected to rise with the new borrowing which entails selling of bonds in tranches of USD2.5 billion and USD3.0billion including a mix of Eurobonds and Diaspora bonds.
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This is not the first time IMF would be warning the Nigerian government about its raising debt profile.
The financial institution on Wednesday, October 11, issued a similar warning to the government.
NAIJ.com gathered that Tobias Adrian, IMF director, Monetary and Capital Markets Department, lamented over the fact that the external borrowing of low income countries including Nigeria, keeps rising.
Meanwhile, Kemi Adeosun, the finance minister, has said more than half of the recent loan request by the federal government was to refinance loans taken by former president Goodluck Jonathan's administration.
NAIJ.com gathered that Adeosun, in a statement by her office, said $3 billion of that loan is to refinance the loan by the immediate past administration.
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Source: Naija.ng
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IMF issues another warning over Nigeria's increased foreign borrowing
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