World Bank Is Worried For Nigeria
The Nigerian government has borrowed and continues to borrow domestically and abroad; the world bank is worried.
There are concerns that the government is not earning enough money yet continues request for credit facilities.
The World Bank’s concerns were raised in its newly released Global Economic Prospects report, where it also observed that Nigeria’s economic recovery was being limited by foreign exchange controls.
The bank said that debt servicing costs have risen but remains sustainable for most countries. However, it noted that the rise in Nigerian government’s debt, exchange rate depreciation, and increased recourse to non-concessional borrowing for infrastructure development have resulted in rising debt servicing costs.
“However, for most countries in the region, the interest-to-revenue ratio remains sustainable, helped by the high share of concessional borrowing. A notable exception is Nigeria, where the Federal Government’s interest-to-revenue ratio rose from 33% in 2015 to 59% in 2016.
“As monetary policies in advanced economies continue to normalise, and global interest rates increase, proactive public debt management will be needed to manage rollover risks in the region,” the report said.
It's definitely not gloomy as the bank noted that with reduction in the attacks on oil facilities in the Niger Delta, Nigeria would soon come out of recession.