FG abandons local loans over high interest rates

The Federal Government says it is now prepared to source for loans to fund its budget deficit from multilateral institutions and international lending partners instead of borrowing locally.

Speaking yesterday at Washington DC, the Minister of Finance, Mrs Kemi Adeosun, said foreign loans were cheaper as some countries had negative interest rates compared to the local market.

Clarifying the recent decision by the Central Bank of Nigeria (CBN) to retain higher interest rates, she denied forcing the apex bank to lower the interest rate at the last MPC meeting.

'When you are doing expansion, you need low interest rates and that is the general economics. If you actually listened, I said monetary policy committees are independent, they know what they are seeing on the monetary supply side. So, do I still need lower interest rates now, yes! And for as long as I am running a deficit financing, I need it. But does that mean that they should lower interest rates at once? No. There was never a call on my part that they should lower interest rates.'