Nigeria’s debt burden

Nigeria’s debt profile, already high, is about to rise again significantly. The World Bank has agreed to help it raise an additional 4.5 billion to add to a debt liability burden that now exceeds $19 billion.

Despite brave persistent talk about diversification,Nigeria remains a mono product economy, heavily reliant on oil exports.

Manufacturing, the favoured route to diversification, is not expanding substantially due to a large infrastructural deficit, particularly in energy provision. Manufacturing firms have have to erect costly power generation  facilities adding to costs and making product  noncompetitive internationally –  one reason Nigeria has been reluctant to sign the recent Africa free trade agreement.

For more  than a decade, Nigeria’s power generation had hovered around 4000  megawatts-compare this to South Africa, the second largest economy, where the power grid churns out nearly  50,00-megawatts, more than 10 times Nigeria’s.

Even the government debt management agency recently warned about the adverse  effect of a high debt burden.