Thursday, September 08, 2016 3.02pm/ Meristem Research
The Minister of Finance recently announced the Federal Executive Council’s (FEC) decision to embark on a 3-Year external borrowing plan. The borrowing plan, which is yet to be unveiled, will include low cost (1.25%) and long term loans (20-yr tenors), in addition to a FGN Eurobond offer.
Mrs. Kemi Adeosun further noted that the concessional loans will be sourced from the World Bank, African Development Bank, Export-Import Bank of China and the Japan International Cooperation Agency. Subsequently, the proceeds of the loans will be channeled into the Agriculture, Power, Mining and Healthcare sectors.
While we await the National Assembly’s approval of the borrowing plan, and extensive details of the loans, we opine that a successful implementation of this plan will help provide the much needed fiscal stimulus, thus aiding the start of the country’s journey to economy recovery.