Plans by the federal government to borrow billions of dollars from the World Bank to plug its budget deficit have run into delays as the international lender is demanding for further reforms from the government as a condition for any loan.
This came barely one month after the Presidency gave the Ministry of Finance its seal of approval to obtain the loan.
People briefed on the talks said the Ministry of Finance was now facing calls from the International Monetary Fund (IMF) and World Bank to push through further reforms on the economy.
These discussions, they said, had held up any agreement on a loan from the bank, Financial Times reported on Monday.
They added that the World Bank had said it would not be able to disburse any loans until 2017 at the earliest because it “has not yet received the macroeconomic framework” needed for the discussions to progress, though the finance ministry disputes that.
The World Bank said it was “continuing its discussions” with Nigeria “on a range of critical reforms for restoring macroeconomic resilience” and “would determine, with the government, the most appropriate instrument to support the reform programme.”
It did not give a timeline for the discussions, expected to continue on the sidelines of the World Bank and IMF meetings in Washington this week.
“Although recent measures, including the adjustment of fuel prices and the move towards more flexibility in the foreign exchange market, are welcome, more are needed to ensure sustained economic benefits,” the IMF’s mission Chief for Nigeria, Gene Leon, said in a statement to the Financial Times.
He added that the federal government needed to “reduce domestic and external imbalances” and provide “greater clarity” on its macroeconomic policy direction.
The Minister of Finance, Mrs. Kemi Adeosun, had in April said that Nigeria planned to secure external financing for a budget shortfall now estimated at N1.8 trillionn by the end of the third quarter.