World Bank and Nigeria in Talks for $2.5 B Loan to Drive Digital Transformation as Revenue from Oil Nosedives
The Nigerian government under the administration of President Muhammadu Buhari is holding talks with the World Bank to obtain a loan of up to $2.5 billion.
According to Mr Hafez Ghanem, the loan is a necessary agent required to resuscitate the country’s fledgeling economy.
One of the major challenges the loan will be used to address is the lack of adequate power supply. The challenge of power supply has been a major deterrent to companies that want to expand their businesses to Nigeria.
Poor power supply means companies need to have their own backup for production and operations to run smoothly. This, of course, results in higher costs for the companies.
“It’s important to resolve the problems of the power sector in Nigeria to bring in more investments. Because you need to bring down the cost of power to make the economy more competitive for the development of industries”Hafez Ghanem
But revitalising power supply in Nigeria is only a fraction of the big picture. The loan will also reportedly help the government make much-needed adjustments in the technology sector.
“The current economic performance of Nigeria is not enough to reduce poverty. We need to accelerate growth”Hafez Ghanem. World Bank’s Vice President for Africa
However, this new loan could put a strain on the nation’s economy. Last year, Nigeria received a loan of $2.4 billion from the World Bank which brought the debt statement of the country to $55.6 billion in domestic debt and $25.6 billion in foreign loans.
Despite the increasing debt burden on the country, the administration is positive that the digital transformation of the country will go a long way in boosting revenue and making it easier for companies to operate and thrive.
Ghanem went on to say that the World Bank is supporting the digital transformation of Nigeria because of the ripple effects it will have on other sectors of the economy.
“Nigeria has a comparative advantage in that area because of the youth, a majority of the population is young. So if we want to create jobs, we need to invest much more in the digital economy.”Hafez Ghanem
Prospective areas that will be developed as a result of this digital transformation drive include the ICT infrastructures in the country and internet penetration across remote parts of the country.
Making sure that internet access is available across board for businesses and individuals will increase productivity and volume of transactions which will reflect in revenues.
As the price of oil continues to take a nosedive, it becomes imperative to look for ways to unlock the potentials that a digitalised economy holds for revenue generation.
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