The World Bank on Wednesday warned Nigeria that Eurobonds and other private sector market or sovereign debt instruments can worsen its debt-to-gross domestic product (GDP) ratio.
Although the bank noted Nigeria is the only low income commodity producing economy that has maintained public debt below 20 per cent of GDP since 2016, it said the federal government needs to ensure it borrows responsibly and focus on prioritising expenditures on investments.
Following the latest rounds of Eurobond issues since January 2017, the Debt Management Office (DMO) said Nigeria’s debt stock shot up to about N21.7 trillion, or $71 billion.
Prior to the coming of President Muhammadu Buhari administration in May 2015, the figure was about N12.06 trillion, the current figure representing an over 80 per cent jump.
But at the launch of its 17th edition of "Africa’s Pulse", a publication on Africa’s economic future analysis in Washington DC, the World Bank said the challenge of high debt countries in Africa was one of its key findings.
PREMIUM TIMES was among a select media group that participated in the live video conference monitored from Abuja. The event was addressed by World Bank’s Chief Economist Africa, Albert Zeufack; and Research Manager, Michael Toman.
The report said high debt distressed countries in Africa grew from eight in 2013 to about 18 by March 2018, attributing this to the significant change in their debt structures.
It said sub-Saharan Africa economy rebounded, with a projected growth at 3.1 per cent in 2018 and about 3.6 per cent between 2019 and 2020.
Although the report said the projected growth was not as fast as expected, Mr Zeufack said it was the first positive increase since the 1.5 per cent rate recorded in 2016.He said the performance of the economy underscored the need for government to speed up macro-economic reforms, continue fiscal adjustments and deepen structural and regulatory reforms to attract more investments to sustain the growth rate.He said the negative impact of rising debts and the need to pay more attention to the issue, which has now exposed African countries to additional risks to fiscal sustainability and development.Mr Zeufack said most countries preferred Eurobonds […]