President Buhari Set to Sign a $2billion Loan Deal from China During Visit Next Week - Details

President Muhammadu Buhari who yet again embark on a world tour to China on Monday, will reportedly sign a loan infrastructure projects deal worth about $2 billion.

Buhari at Aso villa office

Speaking with Reuters in Abuja, Femi Adesina, the presidential special adviser on media and publicity, disclosed that President Muhammadu Buhari will sign a loan deal with China during a visit next week, adding that it will help to finance badly-needed infrastructural projects.

"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," spokesman, Femi Adesina said. 

Nigeria, which has been hit hard by a slump in oil prices, has been in talks with China's state export import bank for a loan for months. A financial source said the loan would fund construction works of Chinese firms for infrastructure projects in Nigeria.

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 has not signed the 2016 budget bill yet as he still awaits details from parliament which passed it last month.

Chinese Foreign Ministry spokesman, Lu Kang had earlier said in Beijing that Buhari would visit China from April 11-15 to sign "cooperation agreements" and attend a business forum. He gave no details.

Buhari, who was elected in March 2015 on a promise to fix mismanagement and corruption, wants to turn around the economy by investing in power plants, transport and infrastructure.

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."