IMF Predicts Nigeria's Next President to Succeed Buhari Will Spend All Revenue on Debt Servicing

IMF Predicts Nigeria's Next President to Succeed Buhari Will Spend All Revenue on Debt Servicing

  • Nigeria's next president after 2023 will not only have a strong leadership skills but economic know how to navigate what lies ahead
  • The International Monetary Fund has painted a very bleak tomorrow which will see all revenue generated used to service debt
  • The Federal government has in its plans to increase Nigeria's debt stock to N46.63tn trillion by end of 2022

Nigeria's fiscal woes are far from over, as once again the International Monetary Fund has raised an alarm about Nigeria's piling debt.

IMF stated this in its latest Sub-Saharan Africa Regional Economic Outlook released on Monday 30, May in Abuja.

Ari Aisen in his statement during his presentation reveals that the Nigerian economy is under serious stress.

IMF, President, Debt Servicing
Kristalina Ivanova Georgieva-Kinova IMF managing director Credit: IMF
Source: Getty Images

He added that many African countries, including Nigeria risk sliding into critical debt servicing problems unless urgent actions were explored to significantly raise revenue.

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Aisen further noted that over 80 per cent of the federal government’s revenue is currently committed to debt service, a situation he described as an “existential problem” while warning it could get worst and hit 100 per cent by 2026 if not closely monitored, ThisDay reports.

He said,

“It is a reflection of low revenue. It is an existential issue for Nigeria. It is essential for macro-economic stability. It is important for the provision for social service,” he said.

Further x-raying the fiscal challenges, he regretted that as an oil exporter, Nigeria was not only unable to take advantage of the current global high oil prices to build reserves, but was also confronted by low earnings due to the subsidy on petroleum products.

Aisen added:

"With N500 billion monthly fuel subsidy payouts, he noted that the country might end up with a record N6 trillion subsidy at by year-end."

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Speaking on the economic outlook for the continent, the IMF official identified key priority areas as reducing debt vulnerabilities, balancing inflation and growth; and managing foreign exchange rate pressures.

Odinkalu: Nigeria's public debt profile has tripled in 7 Years

In an earlier report, Legit.ng reported that Rights activist, Chidi Odinkalu, has said Nigeria’s debt profile has increased three times in the last seven years, that is since Muhammadu Buhari mounted the saddle as Nigeria’s president.

Odinkalu said this in a tweet but did not expatiate as he only provided an undated chat from the Nigeria Bureau of Statistics (NBS).

Odinkalu may not be an economist but available data from Debt Management Office (DMO) says Nigeria’s debt profile has soared to about N35.65 trillion recently because of increased borrowing by Buhari's government.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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