Nigeria seeking World Bank loan

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Nigeria is seeking to move away from a reliance on oil

Nigeria is holding talks with the World Bank to help it fund a forecast record $11bn (£7.7bn) budget deficit.

However, Finance Minister Kemi Adeosun told Reuters it was not applying for “emergency loans”.

Nigeria is believed to be looking for around $3.5bn from the World Bank and the African Development Bank.

Africa’s largest economy has been hit hard by the recent fall in oil prices, and the government needs to find new sources of income to fund its budget.

Last year’s government budget was largely financed by oil revenue.

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Chief Africa economist for Standard Chartered bank Razia Khan told the BBC that going to the World Bank could be attractive as it may offer Nigeria better terms for a loan than it would get from the international money markets.

Nigeria is deliberately boosting spending on infrastructure development to try to boost the economy as it tries to deal with the oil price shock, she added.

The country is also under pressure to devalue the currency, the naira, as it tries to cope with the impact of the declining oil price.

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