The International Monetary Fund (IMF)’s projection that Nigeria might spend over 92 per cent of its revenue on debt servicing in 2022 has pitched the international organisation against Nigeria’s Debt Management Office (DMO).
The IMF, which made the projection in its 2021 Article, also estimated 2021 debt servicing-to-revenue ratio at 85.5 per cent.
It, however, estimated the debt-servicing-to-consolidated revenue (total revenues of the government and its agencies) for 2021 and 2022 at 29 per cent and 32.8 per cent, respectively.
The DMO, in a statement by its Director-General, Mrs Patience Oniha, faulted the IMF report and a similar one by foremost Pan-African Credit Rating Agency, Agusto & Co.
She said that both reports failed to consider the challenges experienced by Nigeria in recent times.
“There were challenges such as two recessions, sharp drop in revenues and security challenges.
“Even more, the analyses do not acknowledge the improvements in infrastructure which have been achieved through borrowing, as well as, the strong measures by the Government to grow revenues,” she said.
She reiterated the fact that the Federal Government was already implementing policies towards increasing revenues and developing infrastructure through Public Private Partnership arrangements, both of which will improve debt sustainability.
She noted that the Federal Government had active and regular engagements with the IMF on borrowing and debt management.
Stakeholders and experts in the finance and economic sector have been expressing worry about Nigeria’s rising debt stock in recent times.
The DMO had, however, explained that the country’s total debt of 92.9 billion dollars, and a debt to Gross Domestic Product (GDP) ratio of 35.51 per cent were within sustainable limits.