DMO Counters IMF on its Estimate that Nigeria Will Spend N93 of its N100 Revenue on Debt Servicing in 2022

• IMF's assessment of Nigeria's debt is unsustainable and that the majority of its 2022 revenue will be used to service debt has been questioned by the Federal government
• The Office in a report estimated that Nigeria would spend N93 of each N100 revenue in 2022 to pay off past debt
• DMO has come out to justify government borrowing, claiming that the impact is evident to everybody to see

Debt Management Office has faulted the International Monetary Fund (IMF) over its position on the nation’s debt servicing obligations.

The debt office also questioned Agusto and co a credit rating agency forecast of Nigeria's debt service around 90 percent.

DMO in a statement on Sunday, 13 February 2022, said that although Nigeria’s debt and debt service levels may have grown over the years, the reports of the two bodies failed to take into consideration the last two recessions in the country, due to low revenue.

DMO queried IMF analysis noting it failed to recognize the improvements in infrastructure, achieved through borrowing.

The Office clarified that the federal government was already implementing policies towards increasing revenues and developing infrastructure through Public Private Partnership arrangements.

It said that the nation’s debt remained sustainable as revenue.

Government pushing to increase revenue

Reacting to IMF on its official Facebook page, the DMO said:

"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.”

TheCable reports that the debt management agency said the federal government is already implementing policies towards increasing revenue generation and developing infrastructure through public-private partnership arrangements.

According to the DMO, these two efforts of the government will improve debt sustainability.

The agency added that the federal government had active and regular engagements with the IMF on borrowing and debt management.

The back story

Meanwhile, Legit.ng had earlier reported that IMF raised concern on the growing public debt amid weak revenue.

In its 2021 Article IV, which was released on Monday, 7 February 2022, IMF noted that the Federal Government could spend as much as 92.6 per cent of its revenue on debt servicing this year.

This is a significant increase from the 85.5 per cent debt servicing-to-revenue ratio it projected in 2020.

Source: Legit.ng