The World Bank and Nigeria are in talks for as much as $2.5 billion in a new tranche of concessionary lending to Africa’s most populous country, Vice President for Africa Hafez Ghanem said.
In the past year Nigeria received $2.4 billion from the World Bank, Ghanem said in an interview in Abuja, the West African nation’s capital, late on Wednesday. “We’re talking about a new set of programs of about the same amount, it should be around $2.5 billion,” he said.
Faced with revenue shortfalls as the output and price of oil, Nigeria’s main export, fell in the past five years, President Muhammadu Buhari’s administration has increased borrowing to finance government spending, with domestic debt at $55.6 billion and foreign loans at $25.6 billion.
To ease the mounting debt burden, Nigeria has sought more credit with low interest and long repayment periods from institutions including the World Bank and the African Development Bank.
The World Bank’s focus in Nigeria is to lift about 100 million Nigerians, half of the population, out of poverty, with special emphasis on women’s education, expanding digital opportunities and solving a power crisis that hobbles economic activities.
“It’s important to resolve the problems of the power sector in Nigeria to bring in more investments,” Ghanem said. “Because you need to bring down the cost of power to make the economy more competitive for the development of industries.”
The World Bank is supporting digital transformation in Nigeria because of its potential ability to transform other areas of the economy including industry, agriculture and services, according to Ghanem.
“Nigeria has a comparative advantage in that area because of the youth, a majority of the population is young,” he said. “So if we want to create jobs, we need to invest much more in the digital economy.”