Nigeria seeks $3bn facility from World Bank for power sector development
... Says inflation rate not high at 11.2%
The Federal Government is proposing $3 billion facility from the World Bank for the power sector development programme. This is a 20 percent increase from the earlier $2.5 billion proposed by the Government.
Zainab Ahmed, finance minister, disclosed this in an interview with journalists on the sideline of the ongoing International Monetary Fund (IMF) and World Bank annual meetings holding in Washington, D.C.
The power sector development programme include development of the transmission network, development of the distribution network as well as removing the challenges within the electricity sector.
“We are going to have full meeting to discuss the power sector recovery programme. 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 to tell them the plan that we have and how much we need. So the funding could be a much as $3 billion. We are pushing for it to be provided in phases, maybe phase one would be $1.5 billion and phase two will be another $1.5 billion,” she said.
The World Bank and Nigeria began talks for fresh $2.5 billon concessionary loan to fill revenue gap. In the past year Nigeria received $2.4 billion from the World Bank.
Responding to questions on bother closure, she said, “We needed to close the border because we are not getting corporation with our neighboring countries. We have over years committed to some alliances, bilateral agreements and our neighbors are not respecting those bilateral agreements”.
A cording to her, the timeline would be when the neighboring countries commit to complying with the commitments signed. “We hope that at some point, there would be discussions at the level of presidents where we would extract strong commitments from our neighbors”.
On inflation rate, Ahmed said 11.2 per cent is not a high inflation rate. “Remember that in January 2017 inflation was 18 per cent and whenever there is any shock within the economy like the border closure the market reacts so you have inflation but it will moderate and it will stabilise within a short period of time”.
The minister said the underperformance of revenue is causing significant strain on the government ability to service debt, and to service government day-to-day expenditure.
“That is why all the work we are doing in the ministry of finance and other economic ministry is to concentrate on driving the increase in revenue,”
Hope Moses-Ashike in Washington, D.C.