Power: FG to obtain fresh $3bn loan from World Bank- Finance minister

Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has disclosed that the Federal Government requested a fresh $3 billion loan from the World Bank to reform the power sector.

The Minister, who disclosed this in an interview with journalists on the sidelines of the World Bank/International Monetary Fund meetings in the United States, explained that her team would be holding further discussions with the management of the Bank to present how the fund would be disbursed for the project.

She said: “There is a proposed $2.5 billion to $3 billion facility for the power sector development programme in Nigeria and this will include the development of the transmission networks and the distribution networks as well as removing the challenges that we currently have now in the electricity sector.

“We are going to have a full meeting to discuss the power sector recovery programme and back home we have been working a great deal with the World Bank to design how this programme will be implemented.

“So we have an opportunity now to have a direct meeting with the leadership of the bank and to tell them the plan we have and how much we need from one to five years.”

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The Federal Government would be pushing for the disbursement of the $3 billion facility in two tranches of $1.5 billion each, she added.

Meanwhile, contrary to the fear of some critics that the debt status of the nation, which stands at N25.7 trillion, is overwhelming, the minister insisted that Nigeria does not have a debt problem.

According to her, what Federal Government needs to do is to increase its revenue-generating capacity in order to boost the revenue to about 50 per cent of Gross Domestic Product and that Nigeria’s current revenue to GDP ratio stands at just 19 per cent, adding that its underperformance is significantly straining the government’s ability to service its debt obligation.

She said: “Nigeria does not have a debt problem. What we have is a revenue problem. Our revenue to GDP is still one of the lowest among countries that are comparable to us. It’s about 19 per cent of GDP and what the World Bank and IMF recommended is about 50 per cent of GDP for countries that are our size. We are not there yet. What we have is a revenue problem.

“The underperformance of our revenue is causing a significant strain in our ability to service debt and to service government day-to-day recurrent expenditure and that is why all the work we are doing at the ministry of finance is concentrating on driving the increase in revenue.”