Shubham Chaudhuri, the Country Director World Bank for
Nigeria, said Africa’s most populous nation has no choice but to borrow to
finance its 2023 budget deficit.
Chaudhuri disclosed this during an interview with Channels
Television on Saturday.
The World Bank chief was reacting to its $800 million
concessionary loan offered to Nigeria.
There have been heavy criticisms from Nigerians and
stakeholders concerning the $800 million loan from the world bank amid the
country’s rising debt profile hovering around N77 trillion with the addition of
the Central Bank of Nigeria’s Ways and Means loan.
However, Chaudhuri explained that Nigeria has no alternative
but to borrow to finance its N10.7 trillion budget deficit.
He noted that whether fuel subsidy is removed or not, the
country still must approach lenders to fund its deficits.
According to him, the World Bank’s $800 million is the most
affordable for Nigeria now compared to loans from the domestic market, Eurobond
or others.
“Everyone needs to be clear on the fact that whether Nigeria
receive the $800 million world bank loan or not, 2023 Nigeria’s budget is
already having a projected deficit of N10.7 trillion, that is if the fuel
subsidies are removed by June but if not, the deficit would be N12 trillion or
more. The deficits have to be financed; the fact is that Nigeria would be
taking more debts to finance its budget deficits. Unfortunately, with revenue
still being low as they are, Nigeria has no choice.
“The question is how do you finance the deficits? It will
reach N10.7 trillion or N12 trillion; our financing is available but other
choices exist. You can borrow from the Eurobond market, the domestic market or
the Central Bank(Which had happened in the past with the ways and means of
financing); all of those sources are quite expensive”, he said.
President Muhammadu Buhari last week wrote to the National
Assembly seeking approval of the World Bank’s $800 million loan.
Earlier, Buhari approved a 2023 budget of N20.51 trillion
with a deficit of N10.78 trillion.
To reduce the budget deficit, the Minister of Finance,
Budget and National Planning, Zainab Ahmed, had hinted at removing fuel
subsidies by the end of June. However, the Ministry later backtracked on the
Fuel subsidies removal plan.
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com