TMSG Faults Criticism of Fresh $1.5bn Loan, Insists Nigeria Not at Risk of Loan Default

Oru Leonard

The Tinubu Media Support Group (TMSG), has expressed concern over what it described as acute ignorance and blatant mischief exhibited by uninformed critics and the opposition over the recent World Bank loan request by the Nigerian government.

The group argued that the stance of partisan opposition parties masquerading as commentators on Nigeria’s loan request smacked of egregious ignorance that should be condemned.

This followed demands by some opposition figures that the global financial institution reject the request by the President Bola Tinubu administration for a fresh $1.5 billion loan.

In a statement signed by its Chairman, Emeka Nwankpa, and Secretary, Dapo Okubanjo, TMSG described as cheap and laughable the conduct of some parties that, despite not understanding the issues, had failed to educate themselves on the procedures the World Bank uses to approve loan requests from countries.

“We indeed find it laughable that some opposition parties and individuals who are supposedly literate and should ordinarily understand governance issues are literally falling over one another to urge the World Bank to reject a recent $1.5 billion loan request by the President Bola Tinubu administration. This is disingenuous.

“While no one can stop politicians from playing politics on everything, especially in an election year, we believe that it should not be at the risk of misleading or misinforming Nigerians on an issue as sensitive as Nigeria’s debt profile.

“We are aware that the World Bank has had to decline loan requests from countries, as it did with Kenya when it sought $600 million in emergency funding in June this year; those decisions are never based on online protests by politically exposed persons.

“For the avoidance of doubt, there are metrics used by the global lender, and these include macroeconomic stability, debt sustainability and the ability to repay loans, as well as the provision of transparent, detailed spending plans. Also, the country would be expected to have passed the Bank’s joint stress-test assessment with the International Monetary Fund (IMF).

“So if a country’s debt-to-GDP ratio is unsustainably high, the World Bank will reject loan requests to avert a default. In Nigeria’s case, it is between 35 and 40%.

“We therefore affirm that publicly available information indicates that Nigeria, under President Tinubu, is one of the few countries in Africa with a very low debt-to-GDP ratio. It is clearly not at risk of debt default, contrary to insinuations by some politicians.

“Even in nominal public debt terms, Nigeria, with a debt of about $120 billion, has a much lower debt profile than other leading economies in Africa, including South Africa ($375bn) and Egypt ($327bn).”

TMSG noted that the fresh loan request by the Bola Tinubu administration comprises three credit facilities totalling $1.5 billion.

“A cursory look at documents from the World Bank shows that the loan comprises three separate $500 million facilities targeted at expanding social protection and improving early childhood development across all the states, as well as scaling up climate-resilient interventions in 19 states of Northern Nigeria.

“One of the $500 million facilities is proposed for the Household Prosperity and Empowerment-Social Protection Project, known as HOPE-SP, which is designed to establish regular social assistance for poor and vulnerable households.

“Aside from supporting targeted unconditional and conditional cash transfers, nutrition, and access to education and health services, the programme would also modernise the social registry, integrate the National Identification Number (NIN) into the Nigerian Social Protection Information System, and strengthen social protection units at federal, state and local government levels.

“The $500 million in additional financing for the Agro-Climatic Resilience in Semi-Arid Landscapes project (ACReSAL) operates across the 19 northern states and the FCT, where it targets land degradation, water insecurity, climate vulnerability and declining agricultural productivity.

“These, for us, are part of the issues which have, over the years, morphed into what is now known as farmer-herder clashes in that part of the country.

“The third $500 million World Bank facility is proposed for the Nigeria Early Childhood Development programme and is expected to cover all 36 states and the FCT.

“It seeks to increase access to integrated quality services for children aged zero to five, covering health, nutrition, early learning, caregiving, water and sanitation, safety and protection, at a time when the World Bank is saying that 40% of children under five in Nigeria are stunted, with most of them in poor rural households.

“So it beggars belief that Nigeria’s opposition elements, who have variously claimed to be interested in a better country, are pushing to prevent Nigerians, especially those in need of social protection across the country, from benefiting from these life-changing programmes.

“We are not surprised that the World Bank is ignoring the display of ignorance by politicians and their supporters on this fresh loan request by the Tinubu administration,” it added.