With declining revenue, Nigeria’s debt position will be worsened as the government is set to embark on massive borrowing of over N4.43tn, the Nigerian Economic Summit Group has said.
The NESG, a private sector-led think-tank, said the country needed at least N10.1tn worth of interventions to ameliorate the impact of COVID-19 and oil price decline on the economy.
It said, “Unfortunately, Nigeria is faced with the dual problem of declining revenue and the absence of adequate savings either in the form of external reserves or fiscal buffers to finance such a huge gap. It, however, said the significant rise in domestic debt “often leads to higher domestic interest payments, which is detrimental to the private sector”.
According to the NESG, lower oil prices and staggering production are likely to persist with negative implications on government finances, other economic sectors and overall economic growth. It said foreign investment inflows into Nigeria would experience significant decline in 2020 given the fall in crude oil price, external reserves and uncertainty caused by the COVID-19 pandemic.
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