Controversy trails $3.5b W’Bank , AfDB emergency loan

FT insists Finance Minister confirmed move
SIGNALS that Nigeria’s 2016 fiscal spending plan is heading for implementation loggerhead between the Federal Ministry of Finance and the  Ministry of Budget and National Planning Ministry yesterday appeared as the two ministries sang different tunes over the allegations that Nigeria  had approached the World Bank and the African Development Bank (AfDB) for an ‘emergency’ loan to finance the terribly deficit 2016 plan which for the first time is being primed to be financed largely from non- oil receipts.

Following the controversy which broke after the Financial Times broke the news on Sunday, the Minister of Finance, Mrs. Kemi Adeosun yesterday denied ever telling the foreign press Nigeria was seeking an ‘ emergency’ loan from the two development financial institutions.

Her denial came as the Minister of State, Budget and National Planning Ministry, Mrs. Zainab Ahmed  on the same day told a delegation from the Nigerian Country a Office of the AfDB that Nigeria had already approached the Institution for about N1.8 trillion to fund the deficit in the 2016 Federal Government budget.

The controversy continued as the Financial Times , seemingly smarting from its story being denied by the Finance Ministry insisted yesterday that it did indeed speak with the minister who reportedly informed it of the emergency plan and hence is “standing by its report that Nigeria has asked the World Bank and African Development Bank for $3.5bn in emergency loans to fill a growing gap in its budget in the latest sign of the economic damage being wrought on oil-rich nations by tumbling crude prices.”

The publication claims it spoke to Nigeria’s Finance Minister Kemi Adeosun and she confirmed that the loans were not an “emergency” measure but rather the “cheapest way possible” to fund a “deficit budget”. But Adeosun has now come out to deny the report.

The minister, in a statement by her Special Adviser on Media Matters, Festus Akanbi, said: “Nigeria had not applied for any emergency loan.”

The statement reads in part: “The truth is that Nigeria, as part of the plans to fund the 2016 budget currently undergoing the approval process of the National Assembly, has indicated an intention to borrow N1.8trillion principally for investment in capital projects to stimulate the economy.

The option of the World Bank is to ensure an optimum financing structure, noting that 2016 budget is part of the Medium-term economic framework of the Federal Government, which the World Bank is aware of.

The proposed budget deficit will be funded equally through external and domestic sources.

Nigeria is exploring the options of multi-lateral agencies like the World Bank and AFDB and export credit agencies such as China Exim Bank due to their concessionary interest rates,” it added.

Meanwhile the Minister of State for Budget and National Planning, Hajiya Zanaib Ahmed while making remarks during a visit to her ministry by the AfDB team confirmed that Nigeria has already approached the bank for assistance though she didn’t say on what terms .

A statement  by Mr.  Charles Dafe, the  Director Information in the Ministry quoting the Minister of State said:  “Presently, we are experiencing different kind of shocks, naira depreciation, oil drops, infrastructure decay, substantial monies from recoveries of looted funds was not factored in as sources of revenue and such would also be utilized for development projects.

It continued: “Also, we are counting on assistance from other developmental partners like African Development Banks to access N1.8 trillion loan needed for Nigeria’s infrastructural development. Assistance is also required in our 2016 – 2020 Medium Term Expenditure Frameworks (MTEF) and the National sustainable development Goals (SDG).”

The controversy is perhaps rearing its head because this is the first time since the return of democracy to Nigeria that the Budget Office has been excised from the Finance Ministry.