The News
The News
Thursday 11 of August 2022

Nigeria seeks Chinese loan


Nigeria’s President Muhammadu Buhari addresses the European Parliament in Strasbourg, France, February 3. Plans for Eurobond road show also shelved.



LAGOS, Nigeria – Nigerian Finance Minister Kemi Adeosun plans to travel to China next week, aiming to negotiate a loan of up to $2 billion to help fund record budget spending, financial and government sources said on Wednesday.

They also said Nigeria — which is suffering its worst economic crisis for decades — has shelved plans to meet investors about returning to commercial borrowing on the Eurobond market. One Nigerian government official told reporters that any loan agreed during Adeosun’s trip could be signed by President Muhammadu Buhari in Beijing next month.

“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,” said the official, who asked not to be named.

With China largely closed for the Lunar New Year Holiday, it is unclear how keen Beijing is on the idea, or how tough a bargain it might demand.

The official acknowledged negotiations had been underway for some time and that the terms had yet to be agreed. However, he added: “Hopefully it may be sorted out

during this meeting and the loan will be signed during President Buhari’s visit to China in March this year.”

The central bank could not confirm whether Governor Godwin Emefiel would be joining Adeosun.

Nigeria wants to raise about $5 billion abroad to cover part of its 2016 budget deficit. This is projected to hit 3 trillion naira ($15 billion) due to heavy infrastructure spending at a time when the slump in global oil prices has slashed it’s export revenues.

Buhari, who was elected in March 2015 on a promise to fix the West African country, wants to turn around the economy by investing in power plants and transport, ending a development paralysis under his predecessor Goodluck Jonathan. The president asked China in December to fund rail and power projects and Adeosun, who visited Beijing last week, has raised the possibility of seeking a loan from the Export-Import Bank of China.


Nigeria had wanted to raise $1 billion from Eurobond investors but has dropped plans to sound them out at a non-deal “road show” which the finance ministry had tentatively planned for March, financial sources say.

“They will wait a bit with a road show as they wouldn’t be able to get a good deal,” said one source familiar with the finance ministry plans.

With world markets in turmoil, investors are wary of lending to anything but highly-rated emerging economies. Nigeria’s reluctance to devalue the naira currency, which has plunged on the black market, would further discourage investors, meaning the cost of commercial borrowing would be prohibitive.