The African Development Bank has described Nigeria as an economy with a moderate risk of debt distress. In its African Economic Outlook 2019 and West Africa Economic Outlook 2019 released in Abuja on Tuesday, the bank also said that growth in Nigeria’s agricultural sector in 2018 was uninspiring.
It attributed the situation to clashes between farmers and herdsmen, flooding and activities of the Islamist terror group, Boko Haram. The Bank said, “By June 2018, the stock of public debt stood at $73.2Bn, up from N71Bn in 2017, representing 17.5 per cent of Gross Domestic Product.
“Despite the increase, Nigeria remained at moderate risk of debt distress. In November 2018, the government issued a Eurobond of $2.9Bn which reflects its new debt management strategy of prioritising Foreign debt to mitigate the high financing costs of domestic borrowing.
“Furthermore, relatively strong oil receipts solidified the current account surplus to an estimated 3.7 per cent and bolstered improvements in the terms of trade by about 13 per cent in 2018 alone.” The report added, “The growing importance of services has bolstered growth in the economy. The sector accounts for about half of GDP, dwarfing the 10 per cent from oil and 22 per cent from agriculture.
“Real GDP growth was an estimated 1.9 per cent in 2018, reflecting a recovery in services and industry – particularly mining, quarrying and manufacturing. The recovery benefited from greater availability of foreign exchange. Growth in agriculture was lacklustre; due partly to clashes between farmers and herders coupled with flooding in key middle-belt regions and continued insurgency in the North-East.”