The World Bank, on Wednesday denied reports that it disagreed with the Finance Minister, Kemi Adeosun over the country’s debt profile and plans by the Federal Government to borrow more to fund infrastructure projects.
The World Bank Senior Economist for Nigeria Gloria Joseph-Raji had described the country’s rising debt profile as unsustainable as revenues haves reduced. “The government is aware that the debt is looking more unsustainable from the point of debt service to revenue ratio. The estimate we had for last year at the Federal level was about 60 per cent. That is coming from about 85 per cent in 2015. That reflects a substantially lower revenue recorded last year by Nigeria,” she had said.
But in an email to the Finance Minister, the Bank’s Senior Communication Officer, Mr Rachid Benmessaoud stated that the media misrepresented and quoted out of context the comments made by Joseph-Raji.
“On October 11 during the launch of Africa’s pulse, the World Bank’s biannual analysis of African economies, World Bank Senior Economist for Nigeria, Gloria Joseph-Raji, was asked by a reporter to share her views on the Federal Government plans to increase external borrowings.
“At no point did she mention that the World Bank and the Federal Government of Nigeria disagree on the need to rebalance the Country’s debt portfolio. Where expenditures exceed revenue, government will need to borrow. In doing so, the Federal Government is trying to balance its portfolio towards more external borrowing with lower interest rates and longer maturities.”
According to Benmessaoud, Joseph-Raji rather commended the Federal Government’s effort to rebalance its debt portfolio in order to lower its cost of borrowing, as stated in its 2016/2017 medium term debt management strategy released last year.
“The use of IDA concessional financing among others is supportive of the Federal Government’s effort in this regard with the added focus on poverty alleviation and building shared prosperity in Nigeria,” the statement said.