Nigeria wants to borrow $2.3 billion from World Bank and China-finance minister – Reuters

By Ulf Laessing and Oludare Mayowa

LAGOS Feb 21 (Reuters) – Nigeria wants to borrow at least $1 billion from the World Bank and to sign within months for a $1.3 billion loan from China to fund railway projects, Finance Minister Kemi Adeosun said on Tuesday.

Africa’s biggest economy needs to plug a gap in its record 7.3 trillion naira ($23.17 billion) 2017 budget, which boosts capital expenditures by a quarter to end its first recession in 25 years due to low oil prices.

The government has been in talks with the World Bank for a year and wants to finalise this month a reform proposal necessary for a loan application, according to officials.

“We expected to borrow at least $1 bln dollars,” Adeosun told CNBC when asked about the talks with the Washington-based bank.

“There is also some possibility of doing sector specific intervention in the power sector, they are working very closely with us on power,” she added, without being more specific.

Nigeria had initially promised to submit an economic plan to the World Bank by the end of December but did not do so, sources told Reuters last month.

Adeosun also said Nigeria had been offered by China’s state Export-Import Bank (Exim) a $1.3 billion loan to fund railway projects.

Nigeria will also present a reform proposal to the African Development Bank to release a second loan tranche worth $400 million, officials have said.

The bank had paid out a first tranche of $600 million but has held back the rest pending reforms. Its president has criticized hard currency curbs hitting investment.

On Monday, the central bank made a step towards reforms by devaluing the naira for retail customers. President Muhammadu Buhari had objected a devaluation, but he is on sick leave in Britain.

Adeosun also said the government wanted to harmonise policies with the central bank and that non-oil revenues were improving, with giving details.

She also said there was no need for a loan from the International Monetary Fund (IMF).

“The IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem.”

Adeosun also said one or two banks have yet to remit state revenues via a Treasury Single Account (TSA) at the central bank created in 2015 to combat corruption.

“Interestingly our whistle-blowing programme (to track down graft) actually picks up tips that bankers were being instructed to rename accounts when they knew that the money belongs to the federal government.” She did not name the banks.

($1 = 315.0000 naira) (Reporting by Ulf Laessing and Oludare Mayowa; Editing by Catherine Evans)

 

Nigeria steps up dollar sales after devaluing FX rate for retail customers – Reuters

CBN

LAGOS Feb 21 (Reuters) – Nigeria’s central bank stepped up dollar sales on the interbank currency market on Tuesday, traders said, a day after the bank effectively devalued the naira for retail currency sales.

The bank sold a total of $6 million to commercial banks at 304.75 per dollar, Reuters data showed, far more than its regular $1.5 million, traders said.

Earlier, the central bank said it would sell $500 million on a 60-day forward contract to help boost dollar liquidity on the interbank market. (Reporting by Chijioke Ohuocha; Editing by Catherine Evans)

 

Naira hits 520/dollar, forex retailers examine CBN action – Punch

dollar to naira

Oyetunji Abioye

The naira tumbled to 520 against the United States dollar at the parallel market on Monday as scarcity of the greenback continued to keep the exchange rate in a free fall mode.

The naira had closed at 516/dollar on Friday, after hitting 510/dollar and 507/dollar last Thursday and Tuesday, respectively.

Experts said demand for dollar for school fees payment overseas as well as Personal Travel Allowance by intending travelers was taking a toll on the exchange rate at the parallel market.

This came just as retail currency traders tried to digest the Central Bank of Nigeria’s new decision to sell dollars to retail users through commercial banks, Reuters reported.

The CBN is planning to sell $1m weekly to each of the country’s 21 commercial banks at a rate of N375 to clear a backlog of demand for retail users and try to narrow the premium between the official and black market rates.

Retail currency users buy dollars from licensed Bureaux de Change operators. However, due to the CBN’s inability to meet dollar demand, the BDCs have tended to source dollars from private sources and resell at a much higher margin, fueling the black market.

Forex traders told Reuters that some banks had compiled a list of bids from customers awaiting dollars.

The CBN has been selling dollars at N305 to clear a backlog of demand from manufacturing, agriculture and airline companies, hoping also to help drag the country out of its worst recession in 25 years.

Experts are divided over the outlook for the naira this year. Some experts have said the naira may hit between 520/dollar and 1000/dollar at the parallel market this year unless the CBN reviews its forex policy.

An economic expert and Chief Executive Officer of CocoSheen Nigeria Limited, Mr. Henry Boyo, said the naira would hit 1000/dollar unless the central bank reviewed its monetary policy framework.

He said the framework was skewed against the naira.