Despite constant warning from IMF, World Bank, Nigeria is not near debt crisis

Despite constant warning from IMF, World Bank, Nigeria is not near debt crisis - FG

- Zainab Ahmed, the minister of finance, has said that the federal government is very careful about its borrowings

- The minister also said that though Nigerian has been receiving warning from IMF and World Bank, the country is still not near debt crisis

- Ahmed added that the government has been careful in the many processes it goes through while borrowing

The minister of finance, Zainab Ahmed has said while government borrows to deliver on its promises, it was also mindful of rising debt burden, which eats up about 25 per cent of the country’s annual earnings.

Ahmed said this in an interview with the News Agency of Nigeria (NAN) on the side-line of the just concluded IMF/World Bank meetings, which took place in Washington DC from April 9 to 14.

Nigeria currently has an external debt stock of about 24.27 billion dollars as at December 31, 2018.

Euro bonds, loans from World Bank Group, China and Africa Development Bank Group make up over 80% of the country’s debt stock.

Ahmed insisted that in spite of warnings by the International Monetary Fund (IMF) and World Bank, the country was not in any way near a debt crisis.

“The World Bank and IMF are cautioning us on the rate at which we are borrowing.

“They are also cautioning us on the need to build fiscal buffers because the global economy is going to be facing some risks and we agree with that.

“We are very mindful of the level of our borrowings. Our borrowing is very much within fiscal limits right now.

“What we are doing is to increase our revenue generating capacity to make it easier for us to meet our debt obligations and our routine as well as capital expenditure,’’ she said.

NAN correspondent raised concerns about whether the Chinese loans to finance the Idu-Kaduna, Lagos-Ibadan and Abuja light rail projects, the expansion of four airport terminals and some hydroelectric projects across the country were healthy for the nation’s economy.

The correspondent also raised concerns about whether the conditions for the loans were favourable to the overall interest of Nigeria.

Ahmed responded saying: “To borrow, we go through several processes of assessments as well as negotiations.

“We make sure we get the best possible terms and whether we are borrowing from financial institutions or in Europe or China or anywhere else, we try to get the best rates of borrowing.

“So far, the conditions we’ve got are very good ones,’’ she said.

Ahmed restated the commitment of the President Muhammadu Buhari-led administration to ensure that the country grows in a manner that would bring many people out of poverty.

According to her, it is for this reason that the government takes its social investment programmes like the school feeding, Conditional Cash Transfers to the poor and vulnerable and TraderMoni programme, very seriously.

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Recall that Legit.ng earlier reported that the Federal Executive Council (FEC) on Wednesday, April 10, said there is no need to worry over the country’s rising debt, that servicing it is sustainable.

The minister of budget and national planning, Udoma Udo Udoma, said this at the end of the FEC meeting that was presided over by Vice President Yemi Osinbajo.

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Source: Legit.ng

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