…Says FG must tackle debt
By Emma Ujah, Abuja Bureau Chief
The President of the African Development Bank, Dr. Akinwumi Adesina, revealed Monday that the bank was developing Security-Indexed Investment Bonds in other to help Nigeria and other African countries to source funds to tackle security and development challenges.
He spoke at the Mid-Term Ministerial Performance Review retreat, in Abuja.
According to him, “African Development Bank is working on developing Security-Indexed Investment Bonds to help African countries and Regional Economic Communities to mobilize resources to tackle these challenges.
“The Security-Indexed Investment Bonds will raise funds on the global capital markets to support countries to upgrade their security architecture, rebuild damaged infrastructure in conflict-affected areas, rebuild social infrastructure and protect zones where there are strategic investments.
“Without security there cannot be investment, without investment there cannot be growth, and without growth there cannot be development. The African Development Bank stands ready to help Nigeria in the design and implementation of Security-Indexed Investment Bonds to raise more resources to tackle its security challenges.”
The AfDB boss stressed the need for the federal government to mobilise private capital for infrastructural development.
Dr. Adesina, also challenged the administration of President Muhammadu Buhari to tackle debt and provide vaccins for Nigerians, in order to grow the nation’s economy.
He projected a rebound to 2.4 percent growth rate for the economy , this year, with a possibility of hitting 2. 9 percent next year.
The President, however, said that growth in Nigeria required immediate action on the growing debt, noting that at 73 per cent, the nation’s debt/revenue ratio was too high.
His words, “The GDP growth rate for the continent will recover to 3.4% this year. We project Nigeria’s economic growth rate will rebound to 2.4% this year and reach 2.9% by 2022.
The recovery will depend on two critical issues: access to vaccines and tackling debt issues.
“Nigeria must decisively tackle its debt challenges. The issue is not about debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35% is still moderate. The big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth. The debt service to revenue ratio of Nigeria is high at 73%.
“Things will improve as oil prices recover, but the situation has revealed the vulnerability of Nigeria’s economy. To have economic resurgence, we need to fix the structure of the economy and address some fundamentals.
Nigeria’s challenge is revenue concentration, as the oil sector accounts for 75.4 % of export revenue and 50 % of all government revenue.
“What is needed for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and the revenue earning potential of the huge non-oil sectors.”
According the AfDB boss, Nigeria must act quickly to reform its ports, not just scratch the surface with decongestion.
His words, “Much will depend on the ports of Nigeria.
“According to the sector operators, the cost of exporting 100 tons of cargo in Nigeria is $35,000, compared to $4,000 in Ghana. Today, the leading ports for West Africa are in Cote d’Ivoire, Ghana, Togo, and Benin Republic. All these countries have modernized their port management systems, leaving Nigeria far behind.”
On vaccines, Dr. Adesina said that Nigeria must build world-class local pharmaceutical industries, able to effectively tackle the production of therapeutic drugs and vaccines, to meet the current challenges of and for the future.
The AfDB, he said, would invest $3 billion in support of local pharmaceutical industries in Africa, including in Nigeria.
High food cost
Dr. Adesina, a former Minister of Agriculture in the country said that prices of food items were rising because of inadequate rainfall and insecurity, but above all, because “farmers no longer have access to quality improved seeds, fertilizers, and farm inputs at scale.”
The post AfDB developing Security-Indexed Investment Bonds for Nigeria, others appeared first on Vanguard News.