- The world bank has decided to reduce Nigeria's economic growth plan from its earlier forecast
- The reason is because of Nigeria's growing debt which it described as a great concern
- In a new report, the World Bank expects more borrowing because debt servicing is lower than revenue.
World Bank has cut Nigeria’s economic growth forecast for 2022 while painting a depressing picture of the finances of Nigeria.
In its report biannual Africa’s Pulse report released on Tuesday, the World Bank says Nigeria's economy will now grow at 3.3% from the 3.8% it earlier forecasted.
World Bank also revealed that Africa's most populous nation will see its debt service-to-revenue ratio surge to 102.3%.
Punch Reports that the World bank expressed concerns about Nigeria's growing debt, warning the issues will stay elevated throughout the forecasting horizon mainly due to persistent problems in the oil production.
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The report reads:
“The combination of low production in the oil industry and unsustainable subsidies is one of the main obstacles to attaining debt sustainability.
"Among Africa’s three largest economies, growth is subdued in Nigeria and South Africa, while the Angolan economy gained from elevated oil prices, increased oil production, and good performance of the non-oil sector."
World Bank praises Angola
Unlike Nigeria, the World Bank says fellow oil-producing country, Angola's public debt will decline to 61.9% of gross domestic product this year from 85.7% in 2021.
It also said Angola will expand 3.1% this year from 0.8% in 2021, thanks to rising oil prices.
"Debt will decline by double digits in Angola (23.8 percentage points), the Republic of Congo (18.2 percentage points), and Equatorial Guinea (12.9 percentage points).
In Angola, a strong kwanza as well as the external receipts from high oil prices will help to bring debt down to 61.9 percent from 85.7 percent recorded in 2021."
The World Bank also expects the Sub-Saharan African region's economic growth to slow to 3.3% in 2022 from 4.1% last year."
The list of African countries with highest debt to China, amount and what the debts are used for
Meanwhile, Legit.ng has reported that Macau is the only country in the world that is debt-free, according to the International Monetary Fund (IMF).
The world’s greatest economies rank among the 20 countries with the highest external debts.
They are the US, Russia, United Kingdom, France, Germany, Japan and China, according to a Daily Trust report.