World Bank Disagrees With Finance Minister Adeosun On Borrowing Says Cost Of Debts Not Sustainable

The World Bank has disagreed with the Minister of Finance, Mrs. Kemi Adeosun, on the need for the Federal Government to borrow more in order to develop the nation’s infrastructure and stimulate the economy.

The World Bank spoke through its Senior Economist, Gloria Joseph-Raji, on Monday in Abuja, saying that the cost of borrowing or paying interest on Nigeria’s debt was not sustainable as revenues to make such payment had dried up.


Adeosun said on Sunday at a press briefing rounding off the World Bank/International Monetary Fund annual meeting in Washington DC, United States that Nigerians would have to tolerate more borrowings in the short term for the government to deliver critical infrastructure.


But Joseph-Raji said that dwindling revenues had raised a concern both at the Federal Government and the World Bank on sustainability of Nigeria’s borrowings as debt-to-revenue ratio had increased by 25 per cent within a period of one year.


The World Bank expert said she was concerned about the sustainability of the country’s debt, especially the huge domestic borrowing with high interest rate, which prompted the Debt Management Office to come up with a strategy to rebalance the country’s debt portfolio.


Also speaking on the issue, the Head of Abuja office of Social Action, a Non-Governmental Organisation active in debt relief advocacy, Mrs. Vivian Bellonwu-Okafor, said the government needed to think about better ways of managing the economy. She said borrowing $3bn from abroad to refinance local debts was replacing one evil with another evil.


From Punchng