Nigeria’s Debt Management Office, DMO faulted the recent report by IMF on Nigeria which warned that higher debt service to government revenues pose risks to fiscal sustainability. This was disclosed in a statement by its Director-General, Mrs Patience Oniha, over the weekend, according to the News Agency of Nigeria.
In an attempt to counter IMF’s position that Nigeria might spend over 92 per cent of its revenue on debt servicing in 2022, Oniha stated that the analysis does not acknowledge the improvements in infrastructure which have been achieved through borrowing.
What the DMO chief is saying about Nigeria’s debt
The DMO boss said that the report did not consider the challenges experienced by Nigeria in recent times. “There were challenges such as two recessions, sharp drop in revenues and security challenges. Even more, the analyses do not acknowledge the improvements in infrastructure which have been achieved through borrowing, as well as, the strong measures by the Government to grow revenues,” she said.
She added that the FG has already commenced implementing policies that boost revenue growth, citing Public Private Partnerships for infrastructure, which she says will improve Nigeria’s debt sustainability. Despite increased concerns by stakeholders and experts in the economic sector over Nigeria’s rising debt stock in recent times, the FG has continued to insist that the loans were necessary to develop infrastructure.
The DMO had earlier explained that the country’s total debt of $92.9 billion, and a debt to Gross Domestic Product (GDP) ratio of 35.51 per cent were within sustainable limits.
What you should know
Nairametrics recently reported that the International Monetary Fund warned that Nigeria’s reported unemployment rates, as at the end of 2020 are yet to come down. However, it cited that recent COVID-19 monthly surveys shows Nigeria’s employment back at its pre-pandemic level.
Nairametrics also reported last month that IMF stated Nigeria and other emerging economies with high foreign currency borrowings and external funding should prepare for possible turbulence. It added that Nigeria spent a sum of $520.78 million on external debt servicing in the third quarter of 2021, rising by 74.2% compared to $298.9 million recorded in the preceding quarter (Q2 2021), according to Debt Management Office (DMO).