Nigeria’s Problem Is Not Debt, But Low Revenue- World Bank

The Country Director of the World Bank,  Shubham Chaudhuri, said Nigeria’s problem is not  the huge amount of debt, but its low revenue.

The World Bank Country Chief disclosed this on Monday during the ongoing 26th Nigerian Economic Summit hosted by the Nigerian Economic Summit Group and the Federal Ministry of Finance, Budget, and National Planning.

Chaudhuri said, “Nigeria does not have a debt problem but a revenue problem.”

He said this as the country enters into a recession resulting from set back in revenue induced by Covid-19.

Africa’s largest oil producer relies largely on oil revenue, but oil GDP contracted by 6.63 per cent and 13.89 per cent in the second quarter and third quarter of 2020.

A fall from the 6.49 per cent oil GDP growth witnessed in the third quarter of 2019.

Nigeria’s official debt according to the Debt Management Office is N31trn. The country also hopes to cover a deficit of N5.2trn in its 2021 budget from multilateral and bilateral finance organisations.

President Muhammadu Buhari had during the budget presentation said despite the challenges of revenue underperformance, the government had met its debt service obligations.

“We are also up to date on the payment of statutory transfers and staff salaries, while overhead costs have been significantly covered.”

Buhari emphasized that revenue generation remains the major challenge for the government.

Nevertheless, he said the Federal Government is determined to tackle the persisting problems with domestic resource mobilization, as there is a limit to deficit financing through borrowing.

He said the time has come for the government to maintain a healthy balance between meeting its growing expenditure commitments and the long-term public financial health.