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.
