President Muhammadu Buhari

The Debt Management Office has said that Nigeria borrowed a whopping $1.3billion from the World Bank Group in one year, bringing the country’s total debt profile to the World Bank to $9.81bn as at September 2019. These figures are contained in a recent data released by the DMO, Wednesday.

Meanwhile, the Nigeria Economic Summit Group NESG has projected that the Nigeria’s poverty rate could hit 35 per cent if the Federal, State and Local Governments in the country fail to put proactive policy measures in place to address the increasing unemployment rate and other poverty indices in the country.

Recall that Nigeria had a few years ago under former President Olusegun Obasanjo secured debt forgiveness for the country, which was also extended to some other poor African nations.

Recall also that the International Bank for Reconstruction and Development and the International Development Association, which make up the World Bank, have ever since been advancing loan facilities to Nigeria.

The IBRD lends to governments of middle-income and creditworthy low-income countries while the IDA provides concessionary loans – called credits – and grants to governments of the poorest countries.

Nigeria’s debt to the IDA and IBRD stood at $9.41bn and N409.51m as of September 30, 2019, compared to $8.39bn and $124m in September 30, 2018, according to the DMO data.

The total amount of loans approved by the World Bank for Nigeria had reached $24.68bn, data obtained from the multinational development bank showed.

As of December 31, 2019, Nigeria had secured $7.14billion loans from the IBRD and $17.54billion loans from the IDA, according to the World Bank data.

 The IBRD and IDA cancelled $971.04million and $1.77billion respectively of the approved loans.

The data showed that a total of $16.89billion had been disbursed to the country, with $5.72billion from the IBRD and $11.17billion from the IDA.

The country had repaid a total of $6.45bn to both institutions ($5.29billion to the IBRD and $1.16billion to the IDA).

The loans, many of which are still being disbursed, were approved for 177 projects in the country, with the first loan secured in 1947.

In November 2019, $75million was approved for the Second Africa Higher Education Centres of Excellence for Development Impact project.

In 2018, $27.4million was approved for the North Core/Dorsale Nord Regional Power Interconnector Project; $125million for the Fiscal Governance and Institutions Project; $225million for the Nigeria-Accelerating Nutrition Results;$150million for the Polio Eradication Support Project; and $100million for Nigeria for Women Project.

Other projects for which loans were approved in 2018 were the States’ Fiscal Transparency, Accountability and Sustainability PforR ($750million); Nigeria Electrification Project ($350million); NG-Electricity Transmission Project ($486m); and Nigeria Erosion and Watershed Management Project ($400million).

 In 2017, $611m was approved for Better Education Service Delivery for All; $159million for the Nigeria: Mineral Sector Support for Economic Diversification Project; $90million for the Regional Disease Surveillance Systems Enhancement Phase II; $200million for the Multi-Sectoral Crisis Recovery Project for North Eastern Nigeria; and $200million for the Agro-Processing, Productivity Enhancement and Livelihood Improvement Support Project.

The nation’s total public debt rose to N26.22trillion as of September 2019 from N25.70trillion in the same period of 2018, according to the DMO.

The DMO said this month that the 2019 Appropriation Act provided for a total new borrowing of N1.61trillion, split equally between domestic and external debt, but only the domestic component of N802.82billion was raised due to the late passage of the 2019 budget and the expectation that the implementation of the 2020 budget would commence on January 1.

It said total debt as a percentage of the GDP was 18.47 per cent as of September 2019 and was well within the limit of 25 per cent but “the low revenue base of Nigeria relative to its GDP is clearly reflected in the high debt service to revenue ratio.”

The debt office said new domestic borrowings this year (N1.59trillion) would be raised through FGN Bonds, Sukuk, FGN Savings Bonds and possibly green bonds.

The NESG also projects that the country’s unemployment rate could rise to over 16 per cent by 2030 based on other assessment parameters, including a $2,700 per capita with the average agriculture share of the GDP. The NESG also projected that the service sector share could hit 54 per cent.

These projections are contained in the group’s 2020 macro-economic outlook for Nigeria published in Abuja, Wednesday.

It also stressed the urgent need for government to adopt appropriate policy measures to deal with the challenges of bourgeoning population and rural-urban drift of millions of Nigerians. It projected that Nigeria’s economy would record a 6.4 per cent growth by 2030 if current challenges facing business were tackled promptly by the government

According to the NESG, Nigeria’s economy remained fragile despite the modest recovery it recorded over the past two years.