Assign modules on offcanvas module position to make them visible in the sidebar.

Testimonials

Visit Elombah.com for breaking news from Nigeria

Visit Elombah.com for breaking news from Nigeria

An anticipated $6.4 billion inflow to Nigeria from different sources in the next few weeks is expected to boost Dollar liquidity and strengthen the Naira against the US Dollar, Elombah.com has learnt.

The $6.4 billion inflow is expected to come from three sources, including Chinese and ADB loans and other international programmes.

According to a Thisday report, a breakdown of the aforementioned amount showed that a total of $4.5 billion is expected into the country following the directive by President Muhammadu Buhari to the Ministries of Finance, Budget and Planning, as well as the Central Bank of Nigeria (CBN) to address outstanding issues in securing the loan from the Peoples’ Republic of China.

There is also the balance of the $1 billion African Development Bank (ADB) loan. Of this amount, $600 million had been drawn, leaving a balance of $400 million, which is a potential booster to Nigeria’s forex reserves when it flows into the country.

In addition to this, another $500 million is being expected from the Global Medium Term Note Programme which was issued recently and attached to the $1 billion earlier offered and over-subscribed.

The Chinese loan, which is meant for the procurement of strategic machinery needed to boost agricultural development in the country, has a repayment period of 20 years with five-year moratorium and an interest rate of one per cent per annum.

Analysts believe that the receipt of these loans will boost the armoury of the CBN in bolstering the value of the naira.

They also opine that even without the loan, a combination of oil receipts with price stabilising at between $49 – $55 per barrel, as well as the improved production occasioned by the relative peace in the Niger Delta, would give the CBN some fighting power and enhanced its ability to supply the market with liquidity.

One of the global rating agencies, Moody’s Investors Service also held similar view, saying that Nigeria would easily achieve its target of foreign borrowing in 2017 as improved oil output helps the economy to recover from last year’s contraction, the first since 1991.

“The international financial institutions are ready to support Nigeria,” a vice president and senior analytical adviser for Africa at the ratings company, Aurelien Mali, told Bloomberg.

“As long as its project-based lending, the funding will be available from lenders such as the African Development Bank, and the budget support from the World Bank will come on top of that.”

The federal government had proposed a record N7.3 trillion budget for this year to boost infrastructure investment and help its economy recover from a contraction of 1.5 per cent in 2016, the first such slump in 25 years.

The economy was weighed down by a drop in the price and output of oil, its biggest export, which led to a shortage of dollars.

The government has also been negotiating $1.25 billion in budget support from the World Bank and expects to get the remaining $400 million of a $1 billion credit facility from the African Development Bank, Mali said. It can raise the rest from bilateral and multilateral partners and also from lenders through commercial loans and or even a sukuk bond, he said.

Meanwhile, another global rating agency, Fitch has stated that the regulatory stress test results on Nigerian banks conducted recently highlighted disparities in capital strength across the Nigerian banking sector, with large banks collectively much more resilient to stresses than small ones.

Elombah TV

loading...