African Development Bank aims to lend Nigeria $4.1bn for power and farming

Updated 26 September 2016

African Development Bank aims to lend Nigeria $4.1bn for power and farming

ABUJA: The African Development Bank is looking to provide a total of $4.1 billion to Nigeria over 2016 and 2017, its president said, as Africa’s biggest economy seeks to bridge its budget deficit and improve weak infrastructure.
Akinwumi Adesina said the funds would be used to develop the power and agriculture sectors in the west African country, which has slipped into recession for the first time in over 20 years, largely due to low oil prices.
He was speaking after holding talks with the finance minister, Kemi Adeosun, and Vice President Yemi Osinbajo in the capital, Abuja.
Oil sales, the economy’s mainstay, generate 70 percent of government revenues. Attacks on energy facilities in the Niger Delta have cut crude production by around a third since the start of the year.
The OPEC member has been left struggling to fund a record 6.06 trillion naira ($18.6 billion) 2016 budget that aims to stimulate growth by tripling capital expenditure.
Adeosun said Nigeria had asked for a $1 billion loan to help cover its 2016 budget deficit.
She said it would be concessional and carry an interest rate of 1.2 percent.
Adesina later said the pan-African lender was looking to provide $4.1 billion over 2016/2017.
He said “deepening the level of diversification in critical sectors” such as agriculture, solid minerals and manufacturing, was of particular importance.
Aside from a wealthy elite who have profited from oil wealth, most of the 180 million people in Africa’s most populous nation live on less than $2 a day. Development has been held back for decades by a poor power, road and rail network.
“I expect that our portfolio in Nigeria will not decrease — it will actually grow. We expect to invest in Nigeria, by 2019, a total of $10 billion,” said Adesina, a former Nigerian agriculture minister.
The finance minister said the country was not over-borrowing. “What we are trying to do is to ensure that this money we are borrowing, we use it on the key infrastructure that will drive the economy,” she said.
Last week the central bank left its benchmark rate at 14 percent, defying calls from Adeosun to lower rates so that the government could borrow domestically to boost the economy without increasing debt-servicing costs.
Adesina said the AfDB had “asked for the need for better synergies between the macro policy side and monetary policy side and also the fiscal policy side of the economy.”


France heading for worst recession since WWII: minister

Updated 56 min 27 sec ago

France heading for worst recession since WWII: minister

  • France imposed a nationwide stay-at-home order from March 17 after shuttering all nonessential businesses
  • Statistics office Insee said last month that the lockdown has slashed overall economic activity by 35 percent

PARIS: France is likely to see its deepest recession since the end of World War II this year because of the coronavirus crisis, Finance Minister Bruno Le Maire warned Monday.
“The worst growth figure in France since 1945 was -2.2 percent in 2009, after the financial crisis of 2008. We will probably be very far beyond -2.2 percent” this year, Le Maire told a Senate panel.
“It’s an indication of the amplitude of the economic shock we’re facing,” he said.
France imposed a nationwide stay-at-home order from March 17 after shuttering all nonessential businesses. Officials have said the lockdown will last until at least April 15.
Statistics office Insee said last month that the lockdown has slashed overall economic activity by 35 percent, and estimated every month of shutdown would cut annual GPD by three percentage points.
Services, heavy industry and construction are all taking big hits, Insee said, as factories are shut and only a handful of business sectors, such as supermarkets and pharmacies, remain open.
A wave of French blue-chip companies have abandoned their profitability targets for the year, while employers’ associations have warned that hundreds of smaller firms and shops risk bankruptcy.
The government has pledged 45 billion euros ($49 billion) in loan guarantees and other relief to help companies get through the crisis.

Related