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FG debunks rumors 40% of $22.7bn loan to be paid to consultants

by on March 13, 2020
 

The presidency released a statement denying claims that it had the intentions of paying 40% of the $22.7 billion loan approved by the National Assembly, to consulting firms. They stated that these rumors are false.

The Nigerian Government negotiates directly with the bilateral & multilateral lenders involved. There are no middlemen. The general public should note that;

The planned borrowings will be from multilateral and bilateral lenders. They are concessional / semi-concessional, long-tenored and are for the purpose of financing infrastructure and other developmental social projects, which have long-term multiplier effects in terms of job creation, business opportunities and overall increase in Nigeria’s Gross Domestic Product.

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The New Borrowing is consistent with the subsisting Debt Management Strategy which seeks to replace short term high-interest cost domestic debt with low-interest long-term external debt and is one of the measures that is being implemented to moderate the level of Debt Service.

The achievements in this regard are evidenced in the declining share of Domestic Debt in the Total Public Debt from over 83% in December 2015 to about 68% in June 2019. Other loans such as those for the educational sector will contribute to the development of Nigeria’s human capital. Agriculture loans on the other hand, will be used to diversify the economy. There will also be funding for Development Finance Institutions to enhance access to finance for MSMEs.

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Each of the Loans listed in the Plan will be negotiated on individual basis, with the various lenders—it is NOT a single loan.
The Loans will also not be disbursed at once even after all approvals have been received & contracts signed. This is the general practice for project-tied loans.

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