Buhari backs Adeosun’s low-interest borrowing plan – The Cable

President Muhammadu Buhari has backed Kemi Adeosun, minister of finance, on her proposed plan to seek external loans at an interest rate of 1.25 percent.

Adeosun had earlier revealed plans to take long-term loans at a very low interest rate from the African Development Bank, World Bank, China Exim Bank and other specific financial institutions across the world.

“We have a very conservative borrowing programme, and we must borrow; because to do rail — the rail that we have now was done in the colonial era — there has been really significant upgrade,” she had said.

“We will borrow sustainably; we will borrow conservatively to make sure that we don’t burden future generation.”

She said her borrowing plan is clearly different from what obtained in the past, where Nigeria borrowed to pay salaries, stating that the government would be borrowing to invest in infrastructure and generate additional revenue.

In a series of tweets on Thursday, Buhari’s office said the borrowing plan was awaiting the approval of the national assembly.

Asides the concessional loans, the federal government said it would tap into the Eurobond market in “due course”, with Nigeria seeking to fund healthcare, mining, power and Agriculture.

The 2016 budget, with an expansionary outlook, has a deficit in excess of N3 trillion, which the federal government is looking to stem with both internal and external borrowing.

With Nigeria in recession, the ministry of finance and the presidency are working hand-in-hand to revamp the economy in the shortest possible time.