Nigeria’s Debt To Rise Again As World Bank Set To Approve Fresh $1.5bn Loan

Nigeria’s debt profile is set to see an increase in August as the World Bank’s Executive Board may approve part of the country’s $3bn loan application on August 6.

Africa’s largest economy has been struggling to cover its fiscal deficits as the $1.5bn from World Bank has been designated for the country’s budget.

Nigeria’s Country Director, Shubham Chaundhuri, had said that due to the urgency of the fund, the board would decide the $1.5bn loan latest early August.

Nigeria’s Minister of Finance Budget and National Planning, Zainab Ahmed, had in June said that negotiations were on course and the goverment is looking at World Bank going to the board on 6th of August for Nigeria’s approval.

She had said that the country had metall the conditions for the facility.

She had said, “The amount we are raising in the first instance is $1.5 billion for FG and around September October we are hoping to close out on the facility meant for states and the amount is meant to be $1-1.5bn.”

If the loan is approved on August 6, Nigeria’s external debt profile is expected to increase to $34.1bn from $27.67bn in March.

The amount includes recently approved loans from different multilateral lenders, including the international Monetary Fund, World Bank and the African Development Bank, which was not captured in Nigeria’s debt profile as of March this year.

Nigeria had in April received $3.4bn from the IMF to fund its fiscal deficit and current account unbalances.

The AfDB had on June 5, equally approved $288.5mn for it largest shareholder to combat the impact of Covid-19 on its economy.

The World Bank on 25 June approved the Power Sector Recovery Operation $750mn in International Development Association.

Also most recently is the $500m loan approved on July 29, for girls education targeted at Northern Nigeria and Ekiti in the Southwest.

The total is expected to raise the country’s debt by $6.43bn, representing 23.2 per cent rise.

Meanwhile, data from the debt Management Office puts Nigeria’s external debt as of March 2020 at $27.67bn (N9.98tn).

This is excluding the loans approved in the dates succeeding March 31, 2020 as analyzed by THE WHISTLER.

The debt office also placed Nigeria’s domestic debt at $51.63bn (N18.64tn) as of March 31, this year.

Total public debt stock however as of March 31, 2020 was $79.3bn (N28.62tn).

The total public debt when updated with the new loans preceding March 31, will increase by $6.44bn to $85.74bn (N30.95tn).

This is including the $1.5bn set to be approved by the World Bank on August 6, this year.