Nigeria debt profile soars as FG focuses on key infrastructure projects

By Odunewu Segun

Nigeria’s debt profile is on the rise, estimated to be around $57.3 billion at the moment, it could hit the $60bn mark soon if the proposal to secure another $2.3 billion loan and others from the World Bank and the Chinese Exim Bank  to fund key infrastructure projects in the 2017 budget Bank scales through.

Some of these new loan agreements, National Daily gathered, are coming on the heels of revelations by the Director General of the Debt Management Office (DMO), Abraham Nwankwo last week that the nation’s foreign and domestic debts currently stand at about $57.39 billion (N17trillion).

But observers said the economy needs to plug a gap in its record N7.3 trillion naira ($23.17 billion) 2017 budget, where government intends to spend more on capital projects to ease pains of the current recession.

The government has been in talks with the World Bank for over a year and wants to finalise discussions this month by presenting a reform proposal necessary for a loan drawdown according to officials.

Finance Minister, Mrs.Kemi Adeosun, who spoke to CNBC Africa said Nigeria wants to borrow at least $1 billion from the World Bank and to sign within months another $1.3 billion loan from China to fund railway projects.

“We expected to borrow at least $1 billion,” Adeosun told CNBC when asked about the talks with the Washington-based bank. “There is also some possibility of doing sector specific interventions in the power sector, they are working very closely with us on power,” she added, Nigeria had initially promised to submit an economic plan to the World Bank by the end of December but failed to do as planned leading to delay in the approval of the loan application at the World Bank.

Adeosun also said Nigeria had been offered by China’s state Export-Import Bank (Exim) a $1.3 billion loan to fund railway projects, even as she noted that government will also present a reform proposal to the African Development Bank to release a second tranche of $ 1billion loan approval worth $400 million.

The AfDB had last year paid out a first tranche of $600 million, but has held back the balance pending the implementation of reforms by the government. African Development Bank, boss, Akinwumi Adesina, a former Minister of Agriculture in Nigeria, had criticised hard currency curbs hitting investment.

She said there was no need for a loan from the International Monetary Fund (IMF). “The IMF is really a lender of last resort when you have balance of payments problem. Nigeria doesn’t have balance of payments problems per se, it has a fiscal problem.”

“Interestingly our whistle-blowing programme (to track down graft) actually picks up tips that bankers were being instructed to rename accounts when they knew that the money belongs to the federal government.” She did not name the banks.