Desire to hit infrastructure target explains FG’s fresh borrowing

16 February 2012

Business Day | February 16, 2012

Nigeria’s huge developmental needs make it imperative to borrow to finance infrastructure and other developmental projects, with an aim to improving the lives of citizens analysts say, although skepticism abounds among the populace about the ability to deploy such funds effectively.

Nigerian President Goodluck Jonathan only yesterday sought the approval of the Senate to borrow $7.905 billion from the World Bank, Africa Development Bank (ADB), Islamic Development Bank (IDB), and Exim Bank of China, informing that the money would be used to finance a number of projects designed to create employment opportunities, with a view to growing the economy.

Nigeria currently sports a relatively underleveraged balance sheet and its current debt profile remains relatively low, with a debt-to Gross Domestic Product (GDP) ratio of 17% compared to 44% for peers in the developing word.

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