President Muhammadu Buhari will be travelling to China on Sunday to sign a loan infrastructure projects deal worth up to $2 billion to help fund the N3 trillion deficit in the 2016 budget.
While the exact figure for the loan has not yet been confirmed, sources are saying that it could be as high as $2bn, even as the Presidency and Chinese foreign affairs ministry have confirmed the visit.
“I can’t tell you how much until the day the loan will be signed. Both countries will also be signing some bilateral agreements to strengthen their relationship. That’s all I can say now,” the President’s Special Adviser on Media and Publicity, Mr Femi Adesina, said in an interview with Reuters.
The loan is expected to help kick-start Nigeria’s economy, which has been in a slump due to falling oil prices.
Lu Kang, Chinese foreign ministry spokesman, had earlier said Buhari would visit China from April 11-15 to sign “cooperation agreements” and attend a business forum.
According to the Nigerian Minister of Finance, Kemi Adeosun, who had visited China in February to discuss the loan, Nigeria is looking for loans at interest rates of about 1.5 percent.
“We looked at our debt profile and we recognised that one big problem is interest rate. So, we are going to try and borrow as far as possible externally.
“We are borrowing at the cheapest rates. So, multilateral loans are the cheapest. If someone offers me 1.5 per cent over 20 years, I think I should take it.
“That is why we are going to the multilateral agencies first and, thereafter, concessional borrowing and also tap into the Eurobond market,” the minister said.