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World Bank predicts sluggish growth for Nigeria’s economy
The World Bank on Saturday raised concerns over Nigeria’s debt sustainability amid rising fuel subsidy after President Muhammadu Buhari proposed N4 trillion for petrol subsidy last week.
The National Assembly approved the President’s request, raising the fuel subsidy from N2.56 trillion on Thursday.
This came just 24 hours after the former Senate President, Bukola Saraki, claimed Nigeria loses $2 billion annually to a fuel subsidy scam.
In a biannual analysis publication by the Office of the Chief Economist in the World Bank, Africa Region, “Africa’s Pulse,” for April, the Bretton Woods institution said the subsidy payment would weigh heavily on the country’s finances.
The report read: “Risk remains high on increasing fuel subsidies, which could weigh heavily on public finance and pose debt sustainability concerns.
READ ALSO: World Bank raises Nigeria’s 2022 growth forecast to 3.8%
“Persistent fuel subsidies, increasing military spending for security purposes, and rising debt servicing costs weigh heavily on public finance to keep public debt at a sustainable level in Nigeria.”
Although the World Bank said high oil prices would support growth in Nigeria and Angola, their economies, including that of South Africa, would, however, continue to be sluggish in its recovery.
“Non-resource-rich countries are projected to be adversely affected by rising commodity prices, dragging down growth in the region.”
“The opposite occurs with resource-rich countries whose growth would be propelled by favourable terms of trade,” it added.
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