President Muhammadu Buhari will sign a loan deal with China during his visit there next week to finance infrastructure projects and help fund the 2016 budget deficit.
The deal will come after months of talks between the two governments.
While the exact figure has not yet been confirmed, sources are reporting that it could be as high as $2bn.
“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’s all I can say now,” spokesman Femi Adesina stated.
The loan is expected to help jumpstart Nigeria’s economy, which has been in a slump due to falling oil prices.
Chinese Foreign Ministry spokesman Lu Kang confirmed the reports, saying that President Buhari would visit China from April 11-15 to sign “cooperation agreements” and attend a business forum. He did not disclose any further details regarding the loan.
The loan will help finance infrastructure projects throughout Nigeria led by Chinese constructions firms, whose projects have thus far included upgrading the Abuja airport and building railways throughout the country.
The Nigerian government disclosed that the loan would also be used to help finance its 2016 budget deficit, which could be as high as 3tn naira, or $15bn. President Buhari is seeking to secure roughly $5bn in loans from abroad to help finance the deficit.
According to the Nigerian Minister of Finance, Kemi Adeosun, who had visited China in February to discuss the loan, Nigeria is looking for loans at interest rates of about 1.5 percent.
“We are borrowing first of all at the cheapest rates, so multilateral loans are the cheapest,” she disclosed.
The Minister also disclosed that Nigeria is looking to tap into the Eurobond market.