Nigeria’s World Bank Debt Hits N9.81bn -DMO

• Nigeria’s World Bank Debt Hits N9.81bn -DMO

The Nigerian nation total debt to the World Bank Group stood at $9.81 billion after rising by $1.3 billion in the twelve months through September 2019, a recent report by the Debt Management Office (DMO) has revealed.

Analysis of the report shows Nigeria owes $9.41 billion to the International Development Association (IDA) of World Bank as of September 30, 2019, up from $8.39 billion recorded a year ago. While N409.51 million was owed to the International Bank for Reconstruction and Development (IBRD), another agent of the World Bank.

The nation total loans from the apex bank has now reached $24.68 billion, according to a recent data from multinational Development bank.

However, with Coronavirus projected to hurt global oil prices amid falling global demand, the nation’s ability to meet debt obligations in 2020 may be affected.

Earlier this week, Goldman Sachs had projected a daily decline of 260,000 barrels if coronavirus continues to disrupt the world’s largest importer of crude oil, China.

While others doubted its impact would be significance, global oil prices have dropped from their weekly peak on Monday to a thee-month low on Wednesday.

Similarly, Nigeria’s production level has dropped significantly from 1.66 million barrels per day pumped in November to 1.57 million barrels per day in December, according to OPEC latest report. Indicating that the nation has been struggling with output prior to recent happenings despite setting production benchmark at 2.18 million barrels per day in the 2020 budget.

“Nigeria is more affected by reduced oil production. The country’s current production level is 18.81 per cent lower than its 2020 oil production benchmark of 2.18mbpd. Also, lower output would erase the gains made from high oil prices. Thus, lower oil production would adversely affect the country’s fiscal and external position,” analysts at the Financial Derivatives Company Limited said in a report on Tuesday.

Therefore, Nigeria is unlikely to meet her N2.4 trillion or 32 percent of the 2020 budget projected to come from oil revenue if oil output remained low.