Home' Trinidad and Tobago Guardian : February 4th 2016 Contents FEBRUARY 4 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
INTERNATIONAL | BG23
Nigeria is seeking loans from
the World Bank, the
African Development Bank
(AfDB) and other lenders
to help cover this year's
massive budget deficit, the
government and bank officials said.
The deficit is projected at 2.2 trillion naira
(US$11 billion, 10 billion euros) out of a total
budget of 6.08 trillion naira, they said late
Monday, confirming projections first given
in President Muhammadu Buhari's December
The budget plan, which includes sharply
increased spending to stimulate the economy,
calls for 1.8 trillion naira to be covered by
borrowing from multilateral organisations
which the government believes is the cheap-
est funding option.
The Financial Times said Nigeria was
seeking US$3.5 billion in total to fund the
deficit, but the figure could not be officially
The fall in global oil prices since mid-
2014 has slashed revenue for the oil-depen-
dent nation, which derives more than 90
per cent of its foreign exchange earnings
from crude sales.
"We are in continuing dialogue with the
federal government of Nigeria on the prepa-
ration of a Development Policy Operation
(DPO)," David Theis, World Bank spokesman,
said in a statement.
"The proposal... will be submitted to the
World Bank's Board of Executive Directors
for consideration later in the year," he said.
Theis said the World Bank was "strongly
committed to supporting Nigeria" in achiev-
ing its development objectives and optimising
opportunities for its more than 170 million
The AfDB said in a separate statement
Nigeria had approached it for a budget sup-
port loan of US$1 billion.
It said a high-level AfDB delegation held
talks with Nigerian officials last week in
The "request for support is being con-
sidered by the bank and it is envisaged that
an appraisal mission will be in Abuja soon
to work with the authorities and major stake-
holders on this operation."
Nigeria's Finance Minister Kemi Adeosun
said negotiations with both international
lenders were ongoing, adding that the overall
objective of the loan was to provide the
lowest possible cost of funds to finance
"As far as possible, our foreign borrowing
will be tied to specific capital projects. A
number of these projects are revenue-gen-
erating which will be used to fund the loan
repayments," she said.
She said the export credit agencies like
China Exim Bank were also being approached
for funding, and Nigeria was also considering
tapping into the eurobond market. AP
European Central Bank head Mario Draghi has
warned that the "downside risks" facing Europe's
economy have increased due to the recent turmoil
in emerging markets.
Draghi's remark Monday to the European Parliament
in Strasbourg, France, comes as the bank is preparing
to consider adding to its stimulus efforts at its next
meeting on March 10.
He repeated his earlier stance that the bank has
found risks high enough "to review and possibly
reconsider" the level of its stimulus efforts.
He said risks in emerging markets "have increased
again amid heightened uncertainty" since December
3, when the bank decided to cut a key interest rate
and extend its bond-purchase stimulus program by
Financial markets have been volatile this year over
concerns about the slowdown in China, a key trading
partner for Europe and one of the engines of the
Additionally, low oil prices are hurting growth
prospects in producing countries.
Others face investor flight as interest rates in the
United States were
raised in December
for the first time in
nearly ten years. The
prospect of further
rate hikes in the US
has attracted cash
Draghi said some
of these economies
"remain vulnerable to
an abrupt shift in risk
sentiment" that could
lead to tighter credit
conditions and deal a
further setback to
global growth. Reuters
The central bank reported Tuesday that money
sent home by Mexicans overseas hit nearly $24.8
billion last year, overtaking oil revenues for the first
time as a source of foreign income.
Remittances were up 4.75 per cent from 2014 when
they totaled $23.6 billion, the Bank of Mexico said.
They had never before surpassed petroleum since
the Bank of Mexico began tracking them in 1995.
Analysts pointed to slumping global prices for oil,
which earned Mexico $23.4 billion in 2015, and
improved economic conditions in the United States,
home to more than 11 million Mexicans and the source
of nearly all Mexico's remittances.
"There is an advance in the recovery of the US
economy that has a very high correlation to jobs
available for immigrants, and that has a very important
impact on the amount of money they send to Mexico,"
said Alfredo Coutino, Latin America director for
Alejandro Cervantes, an economist with Grupo
Financiero Banorte, said remittances' rise over oil
reflects an economy that has diversified since the
North American Free Trade Agreement took effect
"Before NAFTA the flow of petroleum exports rep-
resented nearly 80 per cent of the total dollar income
for the Mexican economy," Cervantes said, noting
that today it is less than 20 per cent. "The lesson
is that the Mexican economy, on the whole, is no
longer so dependent on oil."
Manufacturing exports are currently Mexico's No
1 source of foreign income. AP
ECB's Draghi flags
risks to economy
nearly $24.8 billion in
2015, topping oil income
Nigeria seeks big loans from
World Bank, other lenders
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