Hopes of federal government getting funds soon to lift the country’s economy out of recession has hit the rocks as international financial institutions have refused to lend Nigeria any money.
According to Reuters, the decision of the financial institutions is the absence of a clear economic plan by the President Muhammadu Buhari administration with which the banks can work with.
Some of the banks turning their back on Nigeria include the World Bank and the African Development Bank (AfDB) among others.
Reuters wrote of World Bank’s stand on the loan: “The government has been in loan talks with the World Bank for a year. It had told the lender it would present its proposed reforms to make the economy more resilient and attractive to investment by the end of December, according to Western diplomats and a Nigerian official who declined to be named as they are not authorised to speak publicly.
“But this has not happened and as a result of the delay, which the government has not explained, the Washington-based bank has not been able to consider a loan yet….“
For AfDB, it reports that the bank is holding to the second tranche of funds to the Nigerian government after paying out the first in 2016 because it does not know how the government wants to use the money.
"We are waiting for the economic policy recovery programme and the policy framework for that," AfDB president and former Nigerian agric minister Akinwunmi Adesina was quoted as saying without specifying when the AfDB had expected to receive the reform plans.
Reuters reports that Nigeria really needs the funds but could run into big trouble if it fails to secure the funds and to present a reform programme. This, it reports, could also deter some investors from Nigeria's planned $1 billion Eurobonds sale in March.
It however quotes a Nigerian financial source as confirming that the government was working with a consultancy on putting together a package of proposed reforms.
Meanwhile, after plunging into its worst recession in over two decades, the International Monetary Fund (IMF) has estimated that Nigeria’s gross domestic product(GDP) will grow at 0.8 per cent in 2017.
This was contained in its January 2017 World Economic Outlook – “A Shifting Global Economic Landscape.
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