However, Nigeria’s deepening debt crisis did not occur in isolation. High fiscal deficits in many African countries have made it difficult to build resilience
and tackle the multiple shocks . As at last year, eight African countries were in debt distress and thirteen at high risk of debt distress.
The World Bank gave reasons for the Nigeria situation: “Macroeconomic stability has weakened considerably due to multiple FX rates, high and increasing inflation, rising fiscal pressures, and declining forex reserves. Nigeria’s fiscal position has deteriorated since 2015 due to declining oil revenues and rising expenditures, resulting in persistently high fiscal deficits.
The report pointed out that the oil sector, which hitherto had been the major contributor to fiscal revenues and accounting for about 90 per cent of total exports, has underperformed since 2020 due to declining oil production and the mounting cost of the petrol subsidy which have prevented Nigeria from reaping the benefits of higher global oil prices.
President Ahmed Bola Tinubu at the UNGA pointed that “Nigeria shouldn’t be pitied; Africa shouldn’t be pitied. There should be a level playing ground, there should be some kind of mutually respectful relationship between Nigeria and the rest of the world.” “The IMF should enrich the guidance notes by specific cases scenarios for better application and the guidance notes shouldn’t involved the conclusion of specific scenarios based on the various income categories and Economic structures of the country. The IMF should keenly monitor the utilisation of general SDR allocation in line with the fund’s overarching goal of achieving sustainable economic development of its member country.
“It invariably becomes a debt problem and possibly a debt crisis. The government’s actual revenue can hardly cover the recurrent budget, which implies that the entire capital budget and part of the recurrent expenditure are being funded from borrowing. This is surely not sustainable.”
Nigeria Latest News, Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
'Mobilise more domestic revenue’ -- IMF advises African countries on avoiding debt crisisThe International Monetary Fund (IMF) said there are five key decisions African leaders must take to avoid a debt crisis, as they attain high-risk status.
Read more »
External debt rises to N13tn over naira depreciationNigeria’s weak naira has pushed the country’s external debt up by N13.38tn; findings by The PUNCH have shown.
Read more »
$10bn debt: CBN defaults on payment to banks, dollar nears N1,000Over two weeks after the Central Bank of Nigeria promised to clear over $10bn foreign exchange debts owed Deposit Money Bank, the apex bank has yet to do so according to findings by The PUNCH.
Read more »
The knots in Tinubu’s lofty debt servicing planThe huge public debt servicing burden on Nigeria has been an issue of great concern to Nigerians as well as the international community, especially the multilateral financial institutions. In the twilight of the administration of former President Muhammadu Buhari, as much as 98 per cent of total revenues that accrued to the Federal Government were used to service the public debt. [ad]That was sad as it impacted negatively on the country’s economy; and President Bola Tinubu appropriately labelled it as “destructive” and clearly unsustainable. The practice put the country under serious financial straits particularly when more borrowings would have to be made to sustain government bureaucracy over the period.
Read more »
Nigerian Bank of Industry’s CEO receives African Banking Award in New YorkThe Chief Executive of Nigeria’s Bank of Industry, Mr. Olukayode Pitan, has been honoured with the Special African Banking Leadership Commendation Award during the just-concluded 9th edition of the International
Read more »
'African countries will remain in chains until they break free from drug barons'President Bola Tinubu has tasked heads of national drug law enforcement agencies in Africa to consolidate the fight against substance abuse and illicit
Read more »