FEDERAL government ministers have opened talks with the World Bank about securing a fresh $2.5bn loan which it hopes to invest in the nation’s power sector in an attempt to end the scourge of inadequate electricity supply and frequent blackouts.
Nigeria currently only generates about 7,000MW of electricity, of which only about 4,000MW is distributed and transmitted. This is well below the 100,000MW required to offer 24 hour electricity supply and to enable Nigeria operate as an industrial economy with manufacturing operations.
This latest loan is expected augment recent ones that have been obtained to address what appears to be a nagging and insurmountable problem. Hafez Ghanem, the World Bank’s vice president for Africa, said that Nigeria received $2.4bn from the World Bank over the past year.
Mr Ghanem said: “We are talking about a new set of programmes of about the same amount, it should be around $2.5bn. It is important to resolve the problems of the power sector in Nigeria to bring in more investments because you need to bring down the cost of power to make the economy more competitive for the development of industries.”
At the moment, Nigeria’s domestic debt is $55.6bn, while foreign loans stands at $25.6bn. Finance minister Zainab Ahmed, recently said Nigeria did not have a debt problem, despite misgivings among economists over the country’s rising debt profile.
According to the minister, rather than debt, the country’s problem was revenue and she accused those criticising the foreign loans taken by the President Muhammadu Buhari administration of insensitivity. She noted that the federal government hoped to raise its revenue performance from the 55% that was attained in 2018 to 85% in the next four years.
Mrs Ahmed said: “Our debt is still very much within a reasonable fiscal limit. In fact, amongst our comparative countries, we are the least in terms of borrowing.”