Exclusive: Nigeria to seek China loan, shelves Eurobond sale for now - sources

Wed Feb 10, 2016 2:08pm EST
 
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By Ulf Laessing and Felix Onuah

LAGOS/ABUJA (Reuters) - Nigerian Finance Minister Kemi Adeosun plans to travel to China next week, aiming to negotiate a loan of up to $2 billion to help fund record budget spending, financial and government sources said on Wednesday.

They also said Nigeria - which is suffering its worst economic crisis for decades - has shelved plans to meet investors about returning to commercial borrowing on the Eurobond market.

One Nigerian government official told Reuters that any loan agreed during Adeosun's trip could be signed by President Muhammadu Buhari in Beijing next month.

"The finance minister, in the company of the central bank governor, is scheduled to be in China sometime next week to conclude negotiations on the $2 billion loan," said the official, who asked not to be named.

With China largely closed for the Lunar New Holiday, it is unclear how keen Beijing is on the idea, or how tough a bargain it might demand.

The official acknowledged negotiations had been underway for some time and that the terms had yet to be agreed. However, he added: "Hopefully it may be sorted out during this meeting and the loan will be signed during President Buhari's visit to China in March this year."

The central bank could not confirm whether Governor Godwin Emefiel would be joining Adeosun.

Nigeria wants to raise about $5 billion abroad to cover part of its 2016 budget deficit. This is projected to hit 3 trillion naira ($15 billion) due to heavy infrastructure spending at a time when the slump in global oil prices has slashed it export revenues.   Continued...

 
Nigeria's President Muhammadu Buhari attends the opening ceremony of the 26th Ordinary Session of the Assembly of the African Union at the AU headquarters in Ethiopia's capital Addis Ababa, January 30, 2016. REUTERS/Tiksa Negeri