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Nigeria may lose IMF loan over romance with China

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Nigeria may lose IMF loan over romance with China

Nigeria may lose its application to secure part of a $30 billion loan from the IMF because of its current policy that favours tying its economy to that of the China’s.

To fund the 2016 budget and the proposed 2017 budget, still with the National Assembly, government had packaged a robust loan proposal, which will see it get a total of $30 billion from a consortium of international credit agencies, including the IMF, World Bank, Germany Bond Bank and African Development Bank (AfDB) , among others as loan.

If secured, Nigeria will have about 30 years to repay with some moratorium of five years to be enjoyed.

But reports say the IMF board rose from its first quarter meeting, on Tuesday, ushering in the 2017 programme without a word on the pending application from Nigerian.

Though no explanation has given by the fund on this, sources indicate that the board was not comfortable with the depth of commitment of Nigeria on some Asian economies, especially China.

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“Nigeria’s current loan plan with some Chinese banks to fund airport development and other projects was seen as a double approach to similar issue,” one of the sources said.

However, the IMF Presidnt, Chrstine Lagarde, who addressed foreign media in New York, was quoted as saying: “We have been concerned with the economic agenda of President (Muhammadu) Buhari’s administration, more than the recurrent question about IMF extending loan to Nigeria.”

Analysts say, if Nigeria fails to secure the loan, the 2017 budget might suffer the same fate as that of 2016, which was only 40 per cent implemented due to its inbuilt $2.2 billion deficit that could not be sourced before the expiration of that financial year.

Though no government official would want to comment on the issue, an aide to the director general Debt Management Office, Dr. Abraham Nwankwo, said the office had not been briefed on any position on the loan.

“No official can comment on issues that are still unfolding. IMF, and indeed, other institutions know how to communicate us on any issue,” he said.

But it could be recalled chat former CBN Governor and current Emir of Kano , Lamido Sanusi, had predicted that no international credit institution would grant Nigeria such a loan until government puts in place some attractive policies, including harmonising its exchange rate regime.

An economist, Henry Moyo, said the best alternative to foreign loans is for Nigeria to diversify its economy for easy inflow of foreign investments.

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