The Debt Management Office (DMO) says Nigeria is actively reducing debt service cost by accessing World Bank loans.
According to the DMO, loans from the World Bank come from the International Development Association, IDA and the International Bank for Reconstruction and Development, IBRD.
“IDA loans are concessional, that is, they allow low charges and are for very long tenors in some cases, exceeding 30 years.
“These are the types of loans required to fund development in countries such as Nigeria.
“By accessing IDA funding, the government is actively reducing debt service costs, since non-concessional funding are usually more expensive.
“Indeed, it will be inefficient for Nigeria to borrow from commercial sources when concessional funding sources such as ODA is available,” the DMO said.
It said that Medium-Term Debt Management Strategy (MTDS 2020-2023) outlined effective debt management models for the country.
“The MTDS actually states that we will maximise funds available to Nigeria from multilateral and bilateral sources in order to access cheaper and longer tenor funds.
“Therefore, borrowing from IDA is actually an implementation of this strategy”.
Nigerians have continued to express displeasure over the federal government’s incessant borrowings, especially with the country’s total public debt at N46.25 trillion, and a growing debt service cost.
Reports have it that the reports that the media has been awash with controversy about World Bank loans to Nigeria in recent times.
This followed announcement by the Minister of Finance, Budget and National Planning, Zainab Ahmed, that the Nigerian Government had secured 800 million dollars from the World Bank to provide post-petroleum subsidy palliatives.
The palliatives are meant for over 50 million Nigerians ahead of June 2023.