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Nigeria’s external debt set to skyrocket from $27.67bn to $34.1bn

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BY ONYEKA AJUMOBI ONOCHIE

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Nigeria’s external debt profile is getting set to skyrocket from $27.67bn, as at March this year, to $34.1bn, with the World Bank’s imminent approval of fresh $1.5bn this month when the global bank’s Executive Board may meet to approve half of the country’s $3bn loan application, August 6.

This comes against the backdrop of the amount being already designated for the country’s budget to cover its fiscal deficits.

According to World Bank, Nigeria’s Country Director, Shubham Chaundhuri, the board would critically look into the $1.5bn loan latest early August due to its urgency, even as Nigeria’s Minister of Finance Budget and National Planning, Zainab Ahmed, had also hinted in June that negotiations were in top gear, with  the government hoping eagerly on World Bank’s board on 6th of August for Nigeria’s approval, adding that the country had met all the conditions for the facility.

The minister had then said, “The amount we are raising in the first instance is $1.5 billion for the Federal Government 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.”

With the approval of the funds on August 6, Nigeria’s external debt profile is then set to skyrocket to $34.1bn from $27.67bn in March.

The breakdown covers the recent loan approvals from various multilateral lenders, including the African Development Bank (AfDB), the International Monetary Fund (IMF) and the World Bank which were yet to be captured in Nigeria’s debt profile as at March this year.

Nigeria had in April received $3.4bn from the IMF to fund its fiscal deficits and current account imbalances, while the AfDB had, equally approved $288.5m on June 5, to tackle the impact of Covid-19 pandemic on its economy, even as the World Bank on 25 June approved the Power Sector Recovery Operation for $750m in International Development Association.

On July 29 also, there was the $500m loan approval designed to tackle imbalances in girl education in Northern Nigeria and Ekiti, Southwestern Nigeria, expecting to skyrocket the country’s debt burden by $6.43bn, representing 23.2%, even as the Debt Management Office (DMO) had placed the country’s external debt at $27.67bn as of March 2020.

 

About Onyeka Ajumobi