World bank says Nigeria should stop excessive borrowing

The World Bank has cautioned Nigeria and other African countries against excessive borrowings.

To check this development, the World Bank is advocating “a balance between massive spending for development on the one hand and moderation in borrowing on the other.

World Bank’s Chief Economist for African Region, Albert Zeufack, spoke on the latest update on the continent’s economy, Africa’s Pulse, via webcast from the bank’s headquarters in Washington DC, United States, on Wednesday.

He lamented that Nigeria’s debt to the GDP ratio is still low but the debt to revenue ratio is already high.

“Fiscal restructuring is going to be challenging and the government has to be careful in order to balance efforts to develop the country with a moderation in borrowing,” the World Bank official said.

On Nigeria, Zeufack argued that the libralisation of the exchange rate being advocated by some international organizations could create inflationary pressures but that with tightening of monetary policies, inflation would reduce.

Growth in 2017 for the Sub-Saharan Africa was put at 2.6 percent.

According to him, after registering the worst decline in more than two decades in 2016, economic growth in Sub-Saharan Africa is rebounding and would hit a 2.6 per cent growth rate this year.

He, however, described it as “a weak growth” and that “the per capita income growth remained negative because the growth does not keep pace with the population growth rate.”