Buhari set for China to sign ‘$2bn loan’

President Muhammadu Buhari will visit China on Monday to sign a loan infrastructure projects deal worth about $2 billion.  Though the exact figure for the loan is yet to be confirmed, the presidency and Chinese foreign affairs ministry confirmed the visit.

Speaking to Reuters, Femi Adesina, the president’s special adviser on media and publicity said: “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 is all I can say now.”

In February, financial and government sources said the loan could be as high a $2 billion, but officials have not provided an update since then.

Nigeria has said it wants to raise about $5 billion abroad to cover part of its 2016 budget deficit which could be as high as 3 trillion naira ($15 billion).

Buhari is yet to sign the 2016 budget, insisting he would have to go through the budget details – which was sent on Wednesday – ministry by ministry.

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.

When Kemi Adeosun, minister of finance, visited China in February, a Nigerian government official said, the loan deal she agreed on could be signed by President Muhammadu Buhari.

“The finance minister, in the company of the central bank governor, is scheduled to be in China sometime next week to conclude negotiations on the $2 billion loan,” the official said.

Adeosun had earlier said the country was looking for a loan with about 1.5 percent interest.

“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,” she said at a KPMG forum in Lagos.

“We are borrowing first of all 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. So, that is why we are going to the multilateral agencies first and thereafter concessional borrowing and also tap into the Eurobond market.”