WELCOME TO GOSPEL NZEKA'S BLOG: Nigeria owes World Bank, AfDB $5.34bn

Friday, 10 May 2013

Nigeria owes World Bank, AfDB $5.34bn

Nigeria’s total indebtedness to the World Bank Group and African Development Bank has reached $5.34bn, our correspondent has gathered.

Information obtained from the Debt Management Office on Thursday showed that the country was indebted to the International Development Association, a lending arm of the World Bank Group, to the tune of $4.598bn.

It was also gathered that the country owed the African Development Bank Group $667.58m.

Calculations showed that the debt owed these two agencies accounted for 80.19 per cent of the country’s total $6.67bn external debt.

A breakdown of the debt showed that the country owed the IDA $4.598bn, while it owed the International Fund for Agriculture Development $83.37m.

The country is indebted to the African Development Bank, African Development Fund, Arab Bank for Economic Development in Africa, European Development Fund and Inter- American Development Bank to the tune of $20.86m, $529.24m, $2.65m, $100.29m, and $14.54m, respectively.

The total external debt rose by $143m in the first quarter of 2013 to $6.67bn from $6.527bn at the end of last year.

It rose consistently throughout 2012. For instance, as of March 31, 2012, it stood at $5.91bn; by June 31, it had risen to $6.03bn, edging higher to $6.3bn by September 31 before closing the year at$6.527bn.

As of December 31, 2012, the Federal Government’s domestic debt stock was N6.537tn with FGN bonds accounting for 62.41 per cent (N4.08tn) of the figure, while Treasury Bills and Treasury Bonds accounted for 32.47 per cent (N2.12tn) and 5.12 per cent (N334.56bn), respectively.

Latest data from the DMO also showed that as of March 31, 2013, the government’s domestic debt stock was N6.493tn.

A breakdown of the data, which was posted on the DMO website, indicates that FGN Bonds at N3.82tn now accounts for 58.84 per cent of the debt, while Treasury Bills (N2.34tn) and Treasury Bonds (N334bn) account for 36.01 per cent and 5.15 per cent of the amount, respectively.

Meanwhile, the World Bank’s Country Director for Nigeria, Ms. Marie-Francois Marie-Nelly, said on Monday that Nigeria would soon be eligible for more funds from the bank.

Speaking to newsmen in Abuja, Marie-Nellysaid the bank had resolved to give Nigeria a blend status in its 2014-2017 Country Partnership Strategy document, which would be released later in the year.

Currently, Nigeria is only eligible to borrow from the bank’s IDA lending window. But with improved rating, the country will be able to borrow from the International Bank for Reconstruction and Development’s lending window.

Analysts, however, said the increasing debt profile was contributing next to nothing to the economy.

The Managing Director, Sotice Investment Company Limited, Mr. Adedayo Toluwase, said, “The concern with the rising debt profile is not really with the rising figures only, a major problem is that the loans are taken and not always used for capital projects or productive sectors of the economy.”

The Chief Executive Officer, FatraxSecurities Company Limited, Dr. Wale Ositelu, said, “There’s a case to be made against the public sector’s growing borrowing requirement. It has become trendy for government to see nothing wrong with its borrowing pattern on the excuse that it was still within the globally acceptable limit of 40 per cent of the GDP.”

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