World Bank warns Nigeria to reduce borrowing amid N82 trillion debt stock

The World Bank Group has encouraged Nigeria to cut back on its borrowing from the Central Bank if it wants to lessen the burden of inflation on the economy.

This was said on Thursday at a business review session at the Lagos Business School by Alex Sienaert, the lead economist for Nigeria at the World Bank.

This follows report by legit.ng that Nigeria’s debt rose to N82 trillion from N77 trillion before the Central Bank of Nigeria (CBN) exchange rate unification as a result of Naira unification.

Why borrowing should be reduced

Punch reported that Sienaert in his keynote address, praised the administration for its recent economic changes but pointed out that these reforms needed to be maintained for the economy to recover from the shocks it is currently experiencing and have significant growth in the near term.

He said: The whole agenda of tackling inflation is obviously a huge one. Some ideas include reducing subsidised CBN lending to medium and large firms and the government borrowing from CBN.

All of them, it claimed, increase the money supply, and reducing them will aid in reducing inflation. Additionally, tariffs will take the place of FX limitations on imports.

He claimed that the economy was under strain because of the considerable increase in the price of petrol. He continued by saying that other strategies would need to be developed to raise more money so that spending could be raised to address the country's true goals.