Tinubu’s Government in Fresh Talks With World Bank For $1.5 Billion Loan, Says Wale Edun

• The Nigerian government has agreed that it is seeking to borrow $1.5 billion from the World Bank to Fund the budget
• The Minister of Finance and Coordinating Minister for the Economy, Wale Edun, said the loan is interest-free and would be disbursed to Nigeria soon
• He insisted that the Nigerian government would not embark on a borrowing spree, especially from the CBN

The government also said it would issue a new Medium-Term Expenditure Framework later in the month.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, disclosed this on Saturday, October 14, 2023, during a press conference at the ongoing World Bank/IMF Annual meeting in Marrakesh, Morocco.

Nigeria's debt profile hits N87 trillion

Edun and President Bola Tinubu insisted a few months ago that the Nigerian government will do less borrowing and focus on internal sources for revenue mobilization to fund the budget and other economic growth agenda.

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He revealed in Morocco that the $1.5 billion World Bank loan would come with a zero interest rate.

According to the Debt Management Office, Nigeria’s public debt has hit N87 trillion since June 30, 2023.

The International Monetary Fund (IMF) has said Nigeria and other countries in Sub-Saharan Africa need to work hard to shore up their revenues and rule out a blanket debt cancellation for the nations.

IMF’s Director of Africa Department, Abebe Selassie, said Nigeria is not in debt distress but might have challenges raising revenue to service its debt.

Nigeria is not qualified for debt forgiveness

Punch reports that Edun said the new World Bank loan would fund development, stating that the facility would be disbursed to Nigeria soon.

He said:

“On the talks with the World Bank on $1.5bn budget support, that is correct. The World Bank is the number one multilateral development bank helping developing countries or funding developing countries’ projects.

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Edun said Nigeria is still servicing its debt and is not qualified to seek debt forgiveness, stating that Zambia is restructuring its debt under the IMF programme called Common Framework, within which creditor countries come together and agree on the basis on which to help a nation that cannot pay its debt.

Edun promised Tinubu’s government would not borrow excessively, especially from the Central Bank of Nigeria (CBN).

IMF gives Nigeria, Ghana, and other African countries conditions for debt cancellation

Legit.ng reported that The International Monetary Fund (IMF) has dismissed the idea of total debt cancellation for Nigeria, Ghana, and other African countries.

The IMF African Department Director, Abebe Selassie, said about 50% of total debts in African countries are domestic, making debt cancellations difficult.

According to the Debt Management Office (DMO), Nigeria's total debt stock stands at N87 trillion as of June 30, 2023.

Source: Legit.ng