- FG Working Another $2.5b Loan from World Bank
Despite calls to slow down on mounting debt, the Federal Government is currently in talks with the World Bank for another $2.5 billion loan, according to Hafez Ghanem, the bank’s Vice President for Africa.
Hafez Ghanem disclosed this in Abuja on Wednesday during an interview with Bloomberg. According to him, Nigeria borrowed $2.4 billion from the bank in 2018.
“We are talking about a new set of programmes of about the same amount, it should be around $2.5bn,” he said.
“It is important to resolve the problems of the power sector in Nigeria to bring in more investments because you need to bring down the cost of power to make the economy more competitive for the development of industries,” Ghanem added.
In the first quarter, the nation’s debt rose by N560 billion to N24.9 trillion, while the federal government spent $357.26 million servicing external debt alone in the first quarter of the year. Nigeria’s foreign debt stood at $25.6 billion with a local debt of $55.6 billion.
Debt and recurrent expenditure will represent over 70 percent of the 2020 budget if the proposed budget is eventually approved.
However, the Minister of Finance, Budget and National Planning, Zainab Ahmed, in a recent interview, said the country did not have a debt issue but misgivings amongst economists over Nigeria’s debt profile.
Ahmed had said, “There is a lot of insensitivity around the level of our debt. I want to restate that our debt is not too high; what we have is a revenue problem.
“Our debt is still very much within a reasonable fiscal limit. In fact, amongst our comparative countries, we are the least in terms of borrowing.”