The Debt Management Office has said that the recent publication by a media outfit titled “World Bank Lists Nigeria, Nine Others High-Debt Risk Nations” is erroneous.
In a statement published on the official website of Debt Management Office, the agency stated thus:
“It is important to re-emphasize that the World Bank’s Report, which was misrepresented by The Punch Newspaper, was focused only on the composition of IDA’s Loan Portfolio and did not make any reference to the debt sustainability of the top ten (10) beneficiary countries of IDA Loans, such as India, Pakistan, Nigeria, Kenya and Ghana that the Newspaper erroneously referred to as ‘high-debt risk nations”.
“IDA Loans are typically for Tenors of 30 – 40 years, Grace Period (moratorium on principal repayment) of 7 – 10 years and Service Fee of only 0.75%. The highly concessional nature of IDA Loans satisfies the requirements of the provision of Section 41(1)(a) of the Fiscal Responsibility Act, 2007, which states that Government at all tiers shall only borrow on concessional terms with low interest rate and with a reasonably long amortization period. The cost of IDA Loans, which is the Service Fee of 0.75%, is considerable low thereby moderating the cost of debt service”.
“The DMO wishes to state that Nigeria’s IDA’s Debt Stock as at June 30, 2021 was USD11.7 billion. IDA Loans represent one of the most favourable borrowing options for countries like Nigeria and is also consistent with the Medium Term Debt Management Strategy of the Federal Government”.