The International Monetary Fund, IMF, yesterday, warned Nigeria and other
low income countries against the dangers of reliance on foreign borrowings.
Data by the Nigeria Bureau of Statistics, NBS, indicates the country’s
increased exposure to foreign loans, which rose by 40 percent to $15.047
billion as at Septemb
er 2017 from $10.718 billion in 2015.
Financial Counsellor and Director, Monetary and Capital Markets
Department, IMF, Tobias Andrian gave this warning while speaking at a press
briefing on the Global Financial Stability Report released at the World
Bank/IMF Annual Meetings in Washington D.C.
He warned that greater reliance on
foreign borrowing may at some point become a vulnerability to the economies of
Nigeria and other low income countries. Andrian noted that portfolio inflow to
emerging economies is expected to hit $300 billion in 2017, with Nigeria and
other low income countries benefiting from easy financial conditions by
expanding their access to international bond markets, adding that this is
expected to further support growth prospects in these countries. He said: “Borrowing
by governments, households and companies (not including banks) in the so-called
Group of 20 exceeds $135 trillion, equivalent to about 235 per cent of their
combined gross domestic product. Despite low interest rates, debt servicing
burdens have risen in several economies.
And while borrowing has helped the
recovery, it has also created new financial risks.” IMF commends FG on
infrastructure gap reduction Meanwhile, the IMF has commended the efforts by
the Federal Government to reduce infrastructure gap in the country. Giving this
commendation, in an interview on the sidelines of the launch of the fund’s
Fiscal Monitor, at the ongoing World Bank/IMF Annual Meetings in Washington DC,
Assistant Director, Fiscal Affairs Department, IMF, Mrs. Catherine Pattillo,
said: “There is a need for urgent actions to front-load fiscal consolidation
through mobilising more non-oil revenue.” In another development, the World
Bank yesterday said that economic activities in the Sub-Saharan Africa will growth at 2.4 per
cent this year, up from 1.3 per cent in 2016 but lower than 2.6 per cent
projected in April for the region. The projection was contained in the new Africa’s Pulse, a bi-annual analysis of the
state of African economies conducted by the World Bank released yesterday.
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