Inefficiencies Reason For Investment Loss In Nigeria, Others – World Bank
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The Washington-based World Bank has revealed that inefficiencies in public spending are costing Nigeria and other developing nations a significant portion of their investments.
The global bank disclosed this in its recent report titled “How Can Developing Countries Power Up Public Investment?”
According to the report, more than a third of public investment in emerging markets and developing economies is lost to inefficiencies, undermining potential economic growth and development.
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In extreme cases, it leads to “white elephant” projects with limited economic returns but high costs and, as a result, undermines sovereign risk and debt sustainability.
“Improvements in government spending efficiency are essential for maximising the benefits of public investment.
“Estimates suggest over one-third of public investment in EMDEs may be lost to inefficiency, much more than in advanced economies. Institutional weaknesses, such as regulatory bottlenecks and corruption, often result in lower-quality projects,” the report stated.
As a solution, the World Bank urged developing nations to focus on improving public spending through a transparent procurement process and adequate project monitoring.
This comes as Nigeria’s finance minister, Wale Edun, recently stated that Nigeria needs $20 billion yearly investment to achieve its $1 trillion economy target by 2030.
