The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has said the $3bn loan being sought by the Federal Government from the World Bank would be deployed for reforms in the power sector.
This was said during an interview with journalists on the sidelines of the World Bank/International Monetary Fund meetings holding in Washington DC, United States.
Mrs Zainab, who is leading the Federal Government’s delegation to the meeting said further discussions will be held with the management of the Bank to present how the fund would be disbursed for the project.
Mrs Zainab said the loan would be used in addressing some of the challenges that the country is currently facing in the power sector.
She also added that based on the plan of the Federal Government for the power sector, the loan would be used for the development of transmission and distribution networks to enhance the delivery of electricity.
The finance minister explained that the government would be pushing for the disbursement of the $3bn facility in two tranches of $1.5bn each.
When asked to comment on concerns being raised by the IMF about Nigeria’s debt which stands at N25.7tn the finance minister insists that Nigeria does not have a debt problem.
The minister said, “Nigeria does not have a debt problem. What we have is a revenue problem.
She said with Nigeria’s current revenue to GDP ratio standing at just 19 per cent, the economy’s under performance is significantly straining the government’s ability to service its debt obligation.
“The under performance 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.”
Thus what the 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.
Furthermore, when asked why the Federal Government decided to increase the revenue projection in the 2020 budget to N8.9tn at a time when government revenue performance is less than 60 per cent, she said a lot of measures are being put in place to correct the anomaly.