World Bank Disagrees With Adeosun On Borrowing
And the debate is just getting started, over whether Nigerian government is borrowing too much.
On Sunday, at World Bank annual conference in Washington, Nigeria’s minister of finance, Kemi Adeosun told a news conference that Nigerian government is not borrowing too much.
The government, she maintained, even needs to borrow more if it must develop infrastructure.
This is an argument she has made on a number of occasions.
But some analysts had always disagreed, citing the unsustainability of the debt servicing. In fact, some went as far alleging that government has borrowed so much that Central Bank of Nigeria, literally has to print money for it run the government.
Now on Monday, the World Bank waded into the argument, effectively disagreeing with Adeosun that Nigeria is not borrowing too much.
The World Bank spoke through its Senior Economist, Gloria Joseph-Raji, on Monday in Abuja, saying that the cost of borrowing or paying interest on Nigeria’s debt was not sustainable as revenues to make such payment had dried up.
Adeosun had reiterated during the news conference in Washington that Nigerians would have to tolerate more borrowings in the short term for the government to deliver critical infrastructure.
But Joseph-Raji said that dwindling revenues had raised a concern both at the Federal Government and the World Bank on sustainability of Nigeria’s borrowings as debt-to-revenue ratio had increased by 25% within a period of one year.
She said in 2015 when President Muhammad Buhari took office, the country’s debt to revenue ratio stood at 35% but rose to 60% by 2016, reflecting a reduction in government revenues and rising debt profile, thereby raising a question about the debt sustainability.
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