LAGOS, Nigeria — Nigeria soon will sell $1 billion in Eurobonds to finance a budget deficit as a recession grips the major African oil producer amid foreign currency shortages and double-digit inflation, officials said Friday.
The sale is part of government plans to borrow $5 billion from abroad for capital infrastructure projects to boost Africa’s largest economy.
Already some $3 billion has been secured in low-cost, long-term loans from the World Bank and the African Development Bank, the government announced this week, with the rest expected in bilateral loans from China and Japan.
Nigeria is suffering from low prices of oil, which provides 70 percent of government revenue.
President Muhammadu Buhari has said he will seek emergency economic powers to address the crisis.
Year-on-year inflation reached 17.6 percent in August as food prices doubled. The Sahel Standard reported Friday that some in the northern city of Kaduna have resorted to hunting cats and lizards and harvesting wild leaves. People “are seriously feeling the pangs of an excruciating poverty,” it quoted community leader Hassan Ahmed Rufai as saying.
Nigeria is confronted by multiple challenges. Boko Haram’s Islamic insurgency in the northeast has created a famine by disrupting planting, with the United Nations saying 5 million people urgently need food aid.
Meanwhile, hundreds have been killed in central Nigeria in conflicts between Muslim nomadic herders and Christian farmers. And in the Niger Delta, oil production has been slashed by up to 1 million barrels a day because of attacks on facilities by militants demanding a bigger share of the wealth for residents.
Following months of repairs, about 540,000 barrels of oil a day should be ready for export shortly, Nigeria’s SBM Intelligence risk analysis said Friday, but it “could not come at a worse time” with prices stuck under $50 a barrel.