(2 minute read)
· The Nigerian federal government has put on hold its US$22.7
billion external borrowing (ECB) plan, mentioning that the decision
was taken taking into consideration the current realities
· To tide over the revenue crisis, the finance minister said
that the government is focusing on raising revenue from non-oil
sectors, which have lagged since the discovery of oil due to lop-sided
policies of the government
The Nigerian federal government has put on hold its US$22.7 billion
external borrowing (ECB) plan, mentioning that the decision was taken
taking into consideration the current realities, ostensibly referring
to the disruption the coronavirus has created in the world economy and
its impact on every country including Nigeria. One of the major
impacts of the virus was the unprecedented crash of the oil prices.
The breakout of the deadly coronavirus late last year has completely
unsettled the world economy, with the price of crude oil plunging to
the lowest level. Since 2016, the oil prices were mostly below the
approved benchmark price of US$57 per barrel. That has put a question
mark on the government borrowing from external sources since repayment
would become a difficult task with the oil revenue getting compressed
year after year.
The Finance Minister of Nigeria said that for the time being the
contract of the ECB is put in abeyance and would consider when the
situation gets better. To tide over the revenue crisis, the finance
minister said that the government is focusing on raising revenue from
non-oil sectors, which have lagged since the discovery of oil due to
lop-sided policies of the government.
