Wale Edun, the finance minister, disclosed this during a joint press conference of the ministry of finance and the Central Bank of Nigeria (CBN) at the spring meetings of the International Monetary Fund (IMF) and the World Bank, in Washington D.C.

According to him, the package, approved by the Board of Directors of the World Bank, offers a 40-year term with a 10-year moratorium and a nominal 1 percent interest rate.

Edun, while responding to Journalist said,

“If you look at the fact that we have qualified for the processing, just this week to the Board of Directors of the World Bank, of the total package of $2.25 billion of what you can call, I mean, if there is no such thing as a free lunch, but it is the closest you can get to free money.

It is virtually a grant. It is for about 40 years, 10 years moratorium and about 1% interest. So that also is part of the flow you can count”.

He said Nigeria is set to benefit from budgetary support and low-interest funding from the African Development Bank, adding that negotiations with foreign direct investors are also underway, with promising prospects for substantial investment flows into the country.

Responding to concerns about debt sustainability, Edun highlighted the pivotal role of revenue generation. Oil revenue stands as a primary source, with efforts aimed at maximising its potential for the benefit of Nigerians.

He noted that President Bola Tinubu has set ambitious targets to ramp up oil production, aiming to reach 2 million barrels per day from the current 1.6 million.

The increase in oil production is expected to significantly boost liquidity and aid in debt sustainability efforts. However, there’s a parallel emphasis on diversifying revenue sources beyond oil. The government aims to increase tax revenue from 10 percent to 18 percent of GDP within a few years, while also doubling non-oil revenue to around 22 percent.

“These measures are crucial for enhancing our fiscal resilience and ensuring long-term economic stability,” the finance minister emphasized.

As Nigeria navigates economic challenges, securing substantial funding and focusing on revenue diversification emerge as key strategies to drive sustainable growth and mitigate debt risks.

Nigeria is exploring innovative avenues to bolster its foreign exchange supply and attract investment, with a keen focus on remittances from its diaspora community.

Highlighting the potential of Nigerians abroad, the finance minister noted their substantial financial resources, which could contribute significantly to the Nigerian economy.

“There are Nigerians abroad, they’re doing very, very well. They have significant funding,” Edun remarked.

To harness these resources effectively, the Nigerian government is considering the issuance of diaspora bonds, aiming to attract funds from Nigerians living abroad and foreign currency holdings.

The proposed diaspora bonds are anticipated to serve as an attractive investment instrument, catering to the financial interests of both Nigerians abroad and foreign investors.

“The government is looking at attracting those funds and capturing those funds through a diaspora type of instrument, a diaspora bond.

We think that would be a very attractive instrument for Nigerians abroad and for foreign holdings of foreign currency and we look to having a substantive, substantial and successful issue later in the year,” Edun disclosed.

The government is optimistic about the prospects of a successful diaspora bond issuance, envisioning a substantive and substantial response from investors. Plans are underway to launch the bond later this year, with hopes of securing significant inflows of investment capital to fuel economic growth and development.

Speaking at the press conference, Olayemi Cardoso, governor of the CBN, said, “Besides our meetings with multilateral financial institutions, and foreign investor groups with a keen interest on developments in Nigeria, including a critical gathering at the US Chamber of Commerce, we had very productive discussions with leading International Money Transfer Operators (IMTOs), where we collectively committed to doubling remittance flows through formal channels into Nigeria in the immediate short to medium term.

This target is both ambitious and achievable, and we’re wasting no time in setting up a collaborative task force, reporting to myself, to drive progress and address any bottlenecks that hinder flows through formal channels.”

Nigeria targets the largest share of the World Bank’s planned provision of electricity to 300 million more people on the African continent between now and 2030.

“An exciting development from this week’s meetings is the commitment to provide electricity to an additional 300 million people across Africa by 2030. This initiative is the result of collaborative efforts between the World Bank and other development partners.

Overall, the Nigerian delegation has received positive feedback from their participation at the 2024 World Bank and IMF Spring Meetings,” Edun said.

SERAP also urged the governors to provide information on the projects executed with these loans, including their details and locations.

The group, which made the demands in a Freedom of Information request dated March 30, 2024 and signed by its deputy director Kolawole Oluwadare, said the request is for the purpose of making this information available to the public.

SERAP also urged them to invite the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and Economic and Financial Crimes Commission (EFCC) to investigate the spending of the domestic and external loans obtained by the state government and the FCT.

It stated that Nigerians have the right to know how their states are spending the domestic and external loans obtained by the governors.

SERAP said widely publishing copies of the loan agreements and spending details of the loans obtained would ensure that persons with public responsibilities are answerable to the people for the performance of their duties in the management of public funds.

The FoI requests, read in part, “we would be grateful if the recommended measures are taken within seven days of the receipt and/or publication of this letter. If we have not heard from you by then, SERAP shall take all appropriate legal actions to compel you and your state to comply with our request in the public interest.

“SERAP is seriously concerned that many of the country’s 36 states and FCT are allegedly mismanaging public funds which may include domestic and external loans obtained from bilateral and multilateral institutions and agencies.

“Transparency in the spending of the loans obtained by your state is fundamental to increase accountability, prevent corruption, and build trust in democratic institutions with the ultimate aim of strengthening the rule of law.

“According to Nigeria’s Debt Management Office, the total public domestic debt portfolio for the country’s 36 states and the Federal Capital Territory is N5.9 trillion. The total public external debt portfolio is $4.6 billion.

“Many states and the FCT reportedly owe civil servants’ salaries and pensions. Several states are borrowing to pay salaries. Millions of Nigerians resident in your state and the FCT continue to be denied access to basic public goods and services such as quality education and healthcare.

“Several states including your state are also reportedly spending public funds which may include the domestic and external loans to fund unnecessary travels, buy exotic and bulletproof cars and generally fund the lavish lifestyles of politicians,” the organisation said.

SERAP also maintained that it is seriously concerned that the domestic and external loans obtained by the states and the FCT are vulnerable to corruption and mismanagement.

“Your government has a responsibility to ensure transparency and accountability in how any loans obtained by your state are spent, to reduce vulnerability to corruption and mismanagement,” it added.

The bill successfully passed the third reading in the lower chamber back in May and was sponsored by Femi Gbajabiamila, the former speaker of the house of representatives.

The signing ceremony took place on Monday at the Presidential Villa in Abuja, where Tinubu affixed his signature to the bill. Dele Alake, a former Lagos commissioner of information and strategy, conveyed the news to state house correspondents.

Under the newly enacted legislation, Nigerian students enrolled in tertiary institutions will have the opportunity to access interest-free loans through the Nigerian education loan fund.

Additionally, the bill paves the way for the establishment of the Nigerian education bank, which will hold the authority to manage, oversee, and coordinate the distribution of student loans across the country.

As outlined in the legislation, the Nigerian education bank will receive loan applications on behalf of students through higher educational institutions and will be responsible for carefully evaluating and screening these applications.

This process will ensure that deserving students are provided with the necessary financial aid to pursue their educational aspirations

Ahmad shared this information during a live interview on Channels Television’s Sunrise Daily.

However, Ahmad expressed his belief that the current loan would not be utilized by the current administration.

He suggested that the incoming government might adopt a different approach to utilize the funds. Ahmad stated, “The $800 million—there were extensive discussions within the loan committee, and we advised them.

‘First, leave this matter to the incoming government.’ But since the loan has been granted, we can accept it. If we cannot utilize it, perhaps the incoming government will have a different strategy.”

He also hinted at a potential change in the government’s approach, as there were rumors circulating on social media about the incoming government’s intentions not to retain any of President Buhari’s ministers, citing underperformance.

Ahmad clarified that although the loan has been approved, it will not be utilized by the current administration. The utilization of the loan will depend on the incoming government and their plans.

Recall President Buhari had previously written to the Senate seeking permission to secure an $800 million loan from the World Bank, aimed at mitigating the impact of subsidy removal.

The loan is part of the government’s subsidy palliative measures, which aims to assist 50 million vulnerable Nigerians or 10 million households.

The loan, intended to finance the National Social Safety Network Programme, was presented to the Senate by Buhari.

The loan from the World Bank is aimed at providing relief to the most vulnerable citizens following the removal of petrol subsidies. However, Ndume, in an interview with Trust TV, strongly criticized the loan, labeling it as “unconstitutional and unfair.”

He stated: “I will go to court on that because it is unfair, illegal, and unconstitutional. Let me give you an example: we are two here in the studio, and you say you are going to borrow one million and share it between the two of us. How would you select the recipients? Furthermore, if the burden of repayment falls on the two of us, that is acceptable, but in this case, all Nigerians will have to pay.

“If you randomly give Nigerians ₦4,000 today, how fair is that? It is unconstitutional because the Nigerian constitution does not allow for discrimination.

“These individuals will use their rhetoric to confuse this elderly man (referring to President Buhari), and he will simply approve it. He (Buhari) does not understand these things; they just want to embezzle the funds. We cannot continue to tolerate such practices.

“What they are focused on is what they can gain from it, not what Nigerians can benefit. You can quote me on that. If any of them come to challenge me on TV, I will explain myself. They are misleading the President.”

The Bank said that the report was a sponsored content to smear the reputation of the over 125-year-old financial institution.

Some section of the media reported that the Federal Government (of Nigeria) has filed charges against First Bank of Nigeria Limited, its managing director and three others over allegations bordering on forgery.

The charge sheet, marked CR/266/2023 before the High Court of the Federal Capital Territory, Abuja, also includes two lawyers, Muftau Ande and Dibiaezue Chuks, as well as the Utako Branch Manager of First Bank, Abuja.

In the charge sheet filed by the Federal Ministry of Justice, the five defendants were accused, among other things, of forging a “tripartite legal mortgage without the consent of the proprietor of Whiteplain British School, Mr Francis Chukwumah Nwufor, with intent to commit fraud.”

But in a swift response, FirstBank said the report was sponsored by a ‘delinquent debtor with the intention of embarrassing the Bank and tainting the Bank’s loan recovery efforts and legal enforcement of its security collateral interest in accordance with the terms thereof’.

The statement reads:

“Our attention has been drawn to a sponsored sensational report by some online publications on a charge brought against the Bank.

“While we will not be able to offer further comments as the matter is sub-judice, suffice it to say that the basis of the charge is a spurious allegation made by a delinquent debtor with the intention of embarrassing the Bank and tainting the Bank’s loan recovery efforts and legal enforcement of its security collateral interest in accordance with the terms thereof.

“We wish to assure our numerous customers, stakeholders and the general public that FirstBank operates by the highest standards of ethical conduct and will under no circumstances involve itself in any act of illegality just as it will take necessary legal steps to check any attempt by recalcitrant debtors to fritter away depositors’ funds under its custody. Furthermore, FirstBank remains focused on its mission of providing the best financial services to its numerous customers”, the statement concludes.

Lawmakers in the House of Representatives have also approved the loan application to the China Development Bank.

For the fiscal year 2023, the Federal Government proposed a N19.49 trillion budget, of which over half the funds will be borrowed.

The government intends to finance the massive budget with N7.4 trillion in domestic borrowing and N1.8 trillion in foreign borrowing.

Nigeria’s economic woes continue to deteriorate owing to the high inflation rates, high-interest rates, fuel subsidies, and declining revenues and reserves.

About 133 million Nigerians, (63% of the population, are poor, as measured in multiple dimensions. Because over half of Nigeria’s inflation is driven by rising food prices, many poor individuals and families face hunger.

In a motion titled ‘Rescission of the 2016–2018 Federal Government External Borrowing (Rolling) Plan,’ Abubakar Fulata, Chairman of the House Rules and Business Committee said: “The House notes that the 2016–2018 Federal Government External Borrowing (Rolling) Plan was approved by the Senate and the House of Representatives on March 5, 2020, and June 2, 2020, respectively.

“The House recalls that the National Assembly approved the sum of $22,798,446,773 only under the 2016–2018 Medium Term External Borrowing (Rolling) plan.

“The House is aware of the communications from the Federal Ministry of Finance requesting approval of modifications to the financing proposal for the Nigerian Railway Modernisation Project (Kaduna–Kano segment) occasioned by the COVID–19 pandemic, where of China Exim Bank withdrew its support to finance the project.”

“The House is also aware that, in order to secure funds for the project, the contractor (CCECC Nigeria Limited), in collaboration with the Federal Ministry of Transportation, engaged China Development Bank as a new financier in the amount of $973,474,971.38 only,” he added.

Fulata requested that the House “rescind its decision on the financier and harmonized terms and approve the change of financier from China Exim Bank to China Development Bank” in the circumstances.

The House also approved the following terms from the harmonized term sheet: Segment: Kaduna-Zaria-Kano; financier: China Development Bank; loan type: commercial loan; maturity: 15 years; currency: Euro; interest rate: 2.7% + 6 months Euribor; commitment fee: 0.5%; and upfront fee: 0.5%.

Adeola Adenikinju, an MPC member, stated this in a statement at the most recent MPC meeting.

According to him, the banking industry assets rose by N14.36 trillion, while industry credit rose by N5.14 trillion in 2022.

“All measures of industry aggregates: assets, deposits, and credit rose year-on-year.

“Total assets of the banking industry grew by N14.36 trillion between the end of December 2021 and 2022.

“Similarly, industry credit increased by N5.14 trillion over the same period.

“In addition, total industry deposits rose by N7.08 trillion between end-December 2021 and 2022.

“In December 2022, a total of 130,854 new credits valued at N947.46 billion were granted to various customers”, he said.
The MPC member also disclosed that there was an increase in the maximum lending rate from 28.14 percent to 29.13 percent.

“Interest rate spread month-on-month widened to 23.42 percent in December 2022, as the maximum lending rate increased from 28.14 percent to 29.13 percent and average savings rate rose from 3.93 percent to 4.13 percent between November and December 2022, respectively,” Adenikinju added.

According to a company statement, the move is intended to drive financial inclusion and include beneficiaries in Nigeria’s evolving digital economy.

Sadiq Kassim, TGI’s Group Director of Corporate Affairs, stated this recently in Abuja during a panel discussion at the recently concluded digital economy seminar organized by the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture.

The seminar was themed “Promoting a vibrant economy as a catalyst for economic growth in Nigeria.”

According to him, one of the critical philosophies of the TGI Group is to operate within communities as a partner for growth and development.

“On the documentation leg, we worked with Union Bank and partnered with the Ministry of Digital Economy to set up the NIN registration in designated centers in their communities. We also partnered with various local governments to assist with government-issued ID cards.

With all these in place in the designated centers, within a few weeks, they were able to capture and open bank accounts for the farmers who are now a part of the digital economy.”

Recall that the Union Bank of Nigeria and the Africa Agriculture and Trade Investment Fund (“AATIF”) recently secured a $25 million funding line from AATIF to expand its agricultural business footprint. In response to the Nigerian government’s effort to reduce food imports and ultimately create a sustainable market for local farmers to sell their farm produce, Union Bank anchored its food and agri-finance strategy around promoting local food processing.

Union Bank will be able to increase trade financing and working capital lending to Nigerian businesses, including those whose cashflows have been strained by recent disruptions in global and local markets, thanks to the IFC’s $30 million loan.

The collaboration with Union Bank demonstrates IFC’s commitment to assisting Nigerian small firms in preserving and creating jobs, as well as gaining access to crucial inputs.

“As a bank, we are deeply committed to enabling success for SMEs. We understand the critical role of small businesses in leading Nigeria’s economy toward growth. This funding from IFC will enable us to extend financial relief to our customers during this difficult time. I am confident that the funds will help these businesses harness opportunities, and preserve jobs,” said Mudassir Amray, Managing Director and Chief Executive Officer of Union Bank.

“Strengthening supply chains and trade flows through working capital financing sets the stage for faster growth and economic diversification in Nigeria. IFC’s partnership with Union Bank is part of a wider strategy to ensure the flow of goods and services are sustained despite global trade disruptions,” said Kalim M. Shah, IFC Senior Country Manager for Nigeria, Liberia, and Sierra Leone.

The loan to Union Bank is made possible by IFC’s COVID-19 Emergency Response Working Capital Solutions Envelope, which was launched in 2020 to provide funding to existing IFC clients in emerging markets, who will then extend new loans to companies affected by COVID-19’s economic impacts.

Recent global economic disruptions, such as rising inflation and limited access to finance, have left many Nigerian businesses, particularly SMEs, grappling with supply chain shortages, increased costs of doing business, and limited trade growth.

IFC has an active investment portfolio of $2.3 billion in Nigeria – the second largest in Africa after South Africa – across sectors including agribusiness, healthcare, manufacturing, infrastructure, technology, and financial services.