The World Bank Country Director for Nigeria, Shubham Chaudhuri, has said that the nation has no choice but to borrow to finance its 2023 budget deficit.
Addressing critics of the $800 million concessionary loan the bank offered to Nigeria, Chaudhuri in an interview with Channel Television over the weekend, said Nigeria has no alternative but to borrow to finance its N10.7 trillion budget deficit.
He noted that whether fuel subsidy is removed or not, the country still must approach lenders to fund its deficits.
According to him, “Everyone needs to be clear on the fact that whether Nigeria receive the $800 million world bank loan or not, 2023 Nigeria’s budget is already having a projected deficit of N10.7 trillion, that is if the fuel subsidies are removed by June but if not, the deficit would be N12 trillion or more. The deficits have to be financed; the fact is that Nigeria would be taking more debts to finance its budget deficits. Unfortunately, with revenue still being low as they are, Nigeria has no choice.
The question is how do you finance the deficits? It will reach N10.7 trillion or N12 trillion; our financing is available but other choices exist. You can borrow from the Eurobond market, the domestic market or the Central Bank (Which had happened in the past with the ways and means of financing); all of those sources are quite expensive.”
