The World Bank has said that it is in talks with Nigeria for a
fresh loan of $2.5bn.
This is despite a $2.4bn loan obtained by Nigeria in 2018.
The Vice-President for the African division of the World Bank,
Hafez Ghanem, said this during an interview with Bloomberg on
Wednesday.
Ghanem said, “We’re talking about a new set of programs of about
the same amount, it should be around $2.5bn.”
Faced with revenue shortfalls as the output and price of oil,
Nigeria’s main export, fell in the past five years, President
Muhammadu Buhari’s administration has increased borrowing to
finance government spending, with domestic debt at $55.6bn and
foreign loans at $25.6bn.
To ease the mounting debt burden, Nigeria has sought more credit
with low interest and long repayment periods from institutions
including the World Bank and the African Development Bank.
Nigeria, which vies with South Africa for Africa’s biggest
economy, has made a sluggish recovery since a 2016 contraction,
with gross domestic product expanding only 1.9 per cent in the
three months through June, slowing for the third consecutive
quarter. The World Bank in April lowered its 2019 growth forecast
for Nigeria to 2.1 per cent from 2.2 per cent.
“The current economic performance of Nigeria is not enough to
reduce poverty,” said Ghanem. “We need to accelerate growth.”
The World Bank’s focus in Nigeria is to lift about 100 million
Nigerians, half of the population, out of poverty, with special
emphasis on women’s education, expanding digital opportunities and
solving a power crisis that hobbles economic activities.
“It’s important to resolve the problems of the power sector in
Nigeria to bring in more investments,” he said. “Because you need
to bring down the cost of power to make the economy more
competitive for the development of industries.”
The World Bank is supporting digital transformation in Nigeria
because of its potential ability to transform other areas of the
economy including industry, agriculture and services, according to
Ghanem.
“Nigeria has a comparative advantage in that area because of the
youth, a majority of the population is young,” he said. “So if we
want to create jobs, we need to invest much more in the digital
economy.”
Billionaire philanthropist, Bill Gates, had said recently that
Nigeria’s domestic revenue which was six per cent of GDP was one of
the lowest in the world.
This, he said, was one of the reasons Nigeria could not invest
in health and educational infrastructure in the country.
The Federal Government has in recent times announced plans to
increase taxes, a move which has been opposed by the organised
labour.
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