Nigeria’s Debt Servicing May gulp 123% Next Year

About 123.4 per cent of Nigeria’s revenue may be gulped by debt servicing in 2023, the World Bank has projected . This was according to a presentation made by the new World Bank Lead Economist for Nigeria, Alex Sienaert, in November 2022.

The document was entitled, ‘Nigeria Public Finance Review: Fiscal Adjustment for Better and Sustainable Development Results.’

The document projected that debt servicing would gulp 100.2 per cent of Federal Government revenue by the end of 2022.

This was a decline from the earlier projection in its October Africa’s Pulse report, which is a biannual analysis of the near-term macroeconomic outlook for the region, published during the World Bank/IMF Spring and Annual Meetings in April and October.

In the Africa’s Pulse report, the Washington-based bank had said that Nigeria’s debt service to revenue ratio could stand at 102.3 per cent by the end of 2022.

It had described the public debt in Nigeria as concerning due to the rising debt service-to-revenue ratio.

However, the  Punch reports that the situation would be dire in 2023 as debt surviving would exceed 118 per cent of revenue reported in the first four months of 2022.

In his presentation document, the World Bank lead economist for Nigeria noted that borrowing more money was not the solution for Nigeria.

The document read, “Borrowing more is not the solution: debt costs are rising rapidly, squeezing non-interest spending.

“Debt servicing has surged over the past decade and is expected to continue increasing over the medium-term, crowding out productive spending.”