World Bank in talks with Nigeria for fresh R37bn loan

(Shutterstock)
(Shutterstock)

The World Bank and Nigeria are in talks for as much as $2.5bn (R37bn) in a new tranche of concessionary lending to Africa’s most populous country, Vice President for Africa Hafez Ghanem said.

In the past year Nigeria received $2.4bn from the World Bank, Ghanem said in an interview in Abuja, the West African nation’s capital, late on Wednesday. "We’re talking about a new set of programs of about the same amount, it should be around $2.5bn," he said.

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 (R814bn) and foreign loans at $25.6bn (R379bn).

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% 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% from 2.2%.

Accelerating growth

"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."

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.22
(-0.07)
ZAR/GBP
20.67
(-0.12)
ZAR/EUR
18.37
(-0.09)
ZAR/AUD
11.72
(-0.09)
ZAR/JPY
0.15
(-0.87)
Gold
1827.50
(+0.01)
Silver
24.75
(+0.10)
Platinum
1070.99
(+0.29)
Brent Crude
54.89
(-2.34)
Palladium
2377.00
(+0.59)
All Share
63549.75
(-0.52)
Top 40
58446.35
(-0.49)
Financial 15
11916.89
(+0.01)
Industrial 25
83811.01
(+0.08)
Resource 10
63855.25
(-1.46)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 646 votes
No, I did not.
51% - 1608 votes
My landlord refused
28% - 870 votes
Vote