Akinwumi Adesina, president of the African Development Bank (AfDB), says Nigeria must “decisively” resolve its debt challenges to ignite economic growth.
In September, the Debt Management Office (DMO) said
Nigeria’s total public debt (federal and state governments) climbed to N35.46
trillion at the end of the second quarter of 2021.
Speaking on Monday in Abuja at the opening of a two-day
mid-term ministerial performance review retreat, Adesina said Nigeria’s debt
service to revenue ratio is high.
The AfDB president, however, acknowledged that the
debt-to-GDP ratio remains “moderate”.
Adesina said economic resurgence is possible when Nigeria
removes “structural bottlenecks” that limit the revenue-earning potential of
non-oil sectors.
“Nigeria must decisively tackle its debt challenges. The
issue is not about the debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35%
is still moderate. The big issue is how to service the debt and what that means
for resources for domestic investments needed to spur faster economic growth,”
he said.
“The debt service to revenue ratio of Nigeria is high at
73%. Things will improve as oil prices recover, but the situation has revealed
the vulnerability of Nigeria’s economy. To have an economic resurgence, we need
to fix the structure of the economy and address some fundamentals.
“Nigeria’s challenge
is revenue concentration, as the oil sector accounts for 75.4 % of export
revenue and 50 % of all government revenue.
“What is needed for sustained growth and economic resurgence
is to remove the structural bottlenecks that limit the productivity and the
revenue earning potential of the huge non-oil sectors.”
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