IMF to FG: Nigeria's debt profile swelling up

By Editor on 12/10/2017

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The federal government has been warned about its rising debt profile, especially foreign loans, by the International Monetary Fund (IMF).

The financial institution issued the warning on Wednesday, October 11.

This comes following President Muhammadu Buhari’s recent request to the National Assembly for approval to borrow $5.5 billion to fund the 2017 budget. 

IMF director, Monetary and Capital Markets Department, Tobias Adrian amented over the fact that the external borrowing of low income countries including Nigeria, keeps rising.

He stressed that if the resources gotten from such borrowing are not put to good use, it would become a serious challenge.

According to data from the Debt Management Office, Nigeria’s public debt as at June 2017 stood at $64.19 billion (N19.63 trillion).

However, Catherine Pattillo, IMF assistant director, Fiscal Affairs Department, admitted that Nigeria has undertaken lots of positive reforms such as improving infrastructure especially in the power sector.

Despite this though, she urged the federal government to do more especially in mobilizing more non-oil revenues.

She stated; “The concern in a number of oil exporters is that unless there is action now, debt which has been rising is a concern because of the interest payments.

“So, if you have continuing rise in debt, the interest payments would consume a large part of any revenue that you collect and you won’t be able to use that revenue for the objectives of the economic growth and recovery programme like increasing growth and employment.

“So for insuring that you have the ability to use those revenues for enhancing expenditure, there is a need to make sure that interest to revenue is kept at reasonable level.” 

 

Posted on October, 12 2017

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