The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed this during an interview with journalists on the sidelines of the World Bank/International Monetary Fund (IMF) meetings holding in Washington DC, United States.
Vice President Yemi Osinbajo had in September said the federal government invested about N1.5 trillion in intervention fund in the Nigeria’s power sector in the last two years. Osinbajo said this at a power sector roundtable hosted by Mainstream Energy Solutions Limited (MESL) at its Kainji Hydropower Plant in Niger State last month.
The Vice President, who was represented by the Minister of Power, Sale Mamman, said “the Federal Executive Council (FEC) approved the third round of intervention funding for the sector, with a total of about N1.5 trillion in the last two years. But yesterday in Washington DC, the Finance Minister said she would be holding further discussions with the management of the World Bank to explain how the fresh $3.5bn loan it is seeking would be disbursed for the country’s power project.
She said 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 minister also said the loan would be used in addressing some of the challenges that the country is currently facing in the power sector. She said, “There is a proposed $2.5bn to $3bn facility for the power sector development programme in Nigeria and this will include development of the transmission and distribution networks as well as removing the challenges that we currently have now in the electricity sector.
“We are going to have a full meeting to discuss the power sector recovery programme and back home we have been working a great deal with the World Bank to design how this programme will be implemented.
“So we have an opportunity now to have a direct meeting with the leadership of the bank and to tell them the plan we have and how much we need from one to five years.” The minister disclosed that the government would be disbursing 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 said, ‘‘Nigeria does not have a debt problem.’’
She said what the government needed to do is to increase its revenue-generating capacity in order to boost the revenue to about 50 per cent of Gross Domestic Product. She said with Nigeria’s current revenue to GDP ratio standing at just 19 per cent, its underperformance is significantly straining the government’s ability to service its debt obligation.
The minister said, “Nigeria does not have a debt problem. What we have is a revenue problem. “Our revenue to GDP is still one of the lowest among countries that are comparable to us. It’s about 19 per cent of GDP and what the World Bank and IMF recommended is about 50 per cent of GDP for countries that are our size. We are not there yet. What we have is a revenue problem. “The underperformance 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.’’