Nigeria to Spend 100% of its Revenue on Debt Servicing by 2026 – IMF
The International Monetary Fund (IMF) has projected that Nigeria may spend almost 100 percent of its revenue on debt servicing by 2026.
Ari Aisen, IMF’s resident representative for Nigeria, says this while presenting the organisation’s latest Sub-Saharan Africa Regional Economic Outlook, in Abuja.
He says Nigeria currently spends 89 percent of its revenue on debt.
In February, IMF projected that Nigeria may spend 92.6 percent of its revenue on debt servicing in 2022.
Aisen, however, said the figure would continue to increase if nothing was done to curb the country’s debt level.
“I think the biggest critical aspect for Nigeria is that we have done a macro-fiscal stress test, and what you observe is the interest payments as a share of revenue and as you see us in terms of the baseline from the federal government of Nigeria, the revenue, almost 100 percent, is projected by 2026 to be taken by debt service,” he said.
“So, the fiscal space or the amount of revenues that will be needed, and this, without considering any shock, is that most of the revenues of the federal government are now in fact 89 percent and it will continue, if nothing is done, to be taken by debt service.
“It is a reflection of the low revenue of the country. The country needs to mobilise more revenue to be able to have macroeconomic stability. It has become an existential issue for Nigeria.”