By Adedapo Adesanya
The Nigerian government has requested a loan of $2.5 billion from the World Bank despite having received a $2.4 billion loan from the global financial lender in 2018.
This was disclosed by the Bank’s Vice President for Africa, Mr Hafez Ghanem, who said the World Bank was in discussion with Africa’s largest economy for the concessionary loan.
He said, “We’re talking about a new set of programmes of about the same amount, it should be about $2.5 billion.”
“It’s important to resolve the problems of the power sector in Nigeria to bring in more investments because you need to bring down the cost of power to make the economy more competitive for the development of industries.
“Nigeria has a comparative advantage in that area because of the youth, a majority of the population is young. So, if we want to create jobs, we need to invest much more in the digital economy,” he added.
The Vice President of the bank said it would support Nigeria’s digital transformation because of its potential ability to transform other areas of the economy including industry, agriculture and services.
This loan, if granted, will add to the President Muhammadu Buhari’s administration already increased borrowing to finance government spending, with domestic debt at $55.6 billion and foreign loans at $25.6 billion.
The country is also experiencing revenue shortfalls as a result of the weak output and price of oil, Nigeria’s main export which has dropped in the past five years.
To tackle this, Nigeria has been in quest of seeking credit with low interest, long repayment periods from institutions to including the World Bank and the African Development Bank to ease it burdens.
The country has also introduced a Value Added Tax of 7.5 percent, 3 percent charges on daily individual cumulative or single cash withdrawals in excess of N500,000, 2 percent charges on deposits above the quoted amount and N3 million — 3 percent for deposit and 5 percent for withdrawal for corporate bodies.
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