The International Monetary Fund (IMF) has advised Nigeria to boost revenue collection and rationalize expenditures in order to reduce its debt burden. The IMF has also ruled out the possibility of total debt cancellation for Nigeria and other African economies.
In a statement, IMF African Department Director Abebe Selassie said that debt cancellation, if any, would have to be done on a country-by-country basis. He also noted that the IMF has loaned about $80 billion to Sub-Saharan African economies for emergency funding and Special Drawing Rights allocations since March 2020.
Selassie said that growth in the region was greatly subdued by the COVID-19 pandemic and the ongoing war in Ukraine, but that inflation is gradually dropping. He said that there is a rise in private investment, and consumption is expected to lift growth in many parts of the region by 2024.
Nigeria’s total debt stock stands at $113.4 billion as of June 30, 2023. The IMF has warned that Nigeria’s debt service payments are likely to consume all of its revenue by 2026 if the country does not take steps to reduce its debt burden.
The IMF’s advice to Nigeria is in line with the recommendations of other financial institutions, such as the World Bank. The World Bank has also urged Nigeria to boost revenue collection and rationalize expenditures in order to reduce its debt burden.
The Nigerian government has said that it is committed to reducing the country’s debt burden. However, the government has not yet released any details about how it plans to achieve this goal.
Source: Punch Ng