The World Bank Group has said that it did not disagree with Nigeria’s Minister of Finance, Mrs. Kemi Adeosun, over the country’s borrowings aimed at stimulating the economy and financing infrastructure projects.
The bank, however, said its Senior Economist for Nigeria, Gloria Joseph-Raji, was rather misrepresented and quoted out of context in his comments at an event in Abuja last week.
In a statement signed yesterday by the Senior Communications Officer of the World Bank Group, Rachid Benmessaoud and made available to The Guardian, the bank said that at no point did Joseph-Raji mention that the World Bank and the Federal Government disagreed on the need to rebalance the country’s debt portfolio.
“Where expenditures exceed revenue, governments will need to borrow. In doing so, the Federal Government is trying to rebalance its portfolio towards more external borrowings with lower interest rates and longer maturities,” Benmessaoud said.
According to him, what Joseph-Raji said was a commendation of government’s effort to rebalance its portfolio to lower the cost of its borrowing, as outlined in its 2016-2019 medium-term debt management strategy released last year.
The bank, therefore, reiterated its commitment to help Nigeria restore macro-economic resilience, as well as strengthen the ongoing economic recovery and achieve sustainable inclusive growth.
Meanwhile, Adeosun had reiterated that the choice of increased foreign borrowings, which are at lower interest rates, would not only prevent job losses, but help to reduce huge debt service bill, particularly the local ones.
In a mail to The Guardian, signed by her Special Adviser, Media and Communications, Oluyinka Akintunde, the minister noted that mobilising revenue aggressively was not advisable, or possible in a recessed economy, but as economy reverts to growth, the revenue strategy will be accelerated.
“This is being complemented by a medium-term debt strategy that is focusing more on external borrowings to avoid crowding out the private sector.
“This would also reduce the cost of debt servicing and shift the balance of our debt portfolio from short-term to longer-term instruments,” she said.
She reassured again that government would be very prudent around debt and won’t borrow irresponsibly.