The International Monetary Fund (IMF) has said Nigeria’s N87.3 trillion ($113.4 billion) total public debt position is manageable and does not pose any urgent risks to the economy.
During the presentation of the Economic Outlook for Sub-Saharan Africa at the ongoing IMF/World Bank Annual Meetings in Marrakech, Morocco, Abebe Selassie, the Director of the IMF African Department, emphasized that Nigeria’s primary concern regarding its debt position is the escalating cost of debt servicing.
He pointed out that Nigeria struggles to generate sufficient tax revenue for debt servicing and essential infrastructure investments. Furthermore, he clarified that the IMF did not know about any ongoing debt discussions, debt profiling, or debt restructuring in Nigeria.
He argued that assessing debts should consider not just their nominal value, but also their relationship to various economic variables.
Commenting on the recent development by the Central Bank of Nigeria in lifting FX restrictions on the previously banned 43 restricted Items, the representative of IMF stated that the move is a positive one, as it is posed to boost international trade relations.
He also insisted that the FX reforms as well as subsidy removal are moving in the right direction, adding that fiscal discipline is needed to support Nigeria’s drive for exchange rate stability.
Continuing, the IMF also proposed that Nigeria embrace tighter monetary and fiscal policy conditions to reduce inflation. He said this tightening approach is needed to complement the FX reforms by the CBN.
