Nigeria’s Finance Minister, Taiwo Oyedele, has explained why the Federal Government disregarded the International Monetary Fund’s (IMF) advice on the $5 billion loan from First Abu Dhabi Bank.
Speaking to journalists after the Federal Executive Council meeting on Monday, Oyedele confirmed that Nigeria had already drawn down $1.5 billion from the facility.
According to him, the government opted to access the loan in tranches to reduce borrowing costs.
“The approval for that loan went to the National Assembly, so everybody is aware of it.
“It’s for the refinancing of expensive debts and financing of infrastructure, as well as budgets. So, we don’t want to start making press releases each time we do a drawdown. It is not different from any other loan,” he said.
“So, the loan is meant to be a drawdown in tranches, and one of the advantages of that is, if you need $5 billion and you take everything at once, you start paying interest, even though you’re not spending all of it now.
“So, this has been structured in a way that makes us even more efficient in the cost of borrowing by taking what we need part time,” he said.
Recall that the IMF had warned the Nigerian government against the First Abu Dhabi Bank $5 billion loan.
