international monetary fund
IMF reveals factors hindering Nigeria’s socio-economic development
The International Monetary Fund (IMF) said Nigeria uses most of its revenue to service debt, leaving limited funds available for critical development projects.
Speaking at the Fiscal Monitor press conference at the ongoing IMF/World Bank Annual Meeting in Washington DC, IMF Fiscal Affairs Director Davide Fulcelli said Nigeria needs to adopt more effective revenue mobilization strategies to ease this fiscal burden. Emphasized gender.
Furuseli noted that Nigeria’s debt-to-revenue ratio stands at around 60%, severely constraining the government’s ability to invest in social and economic programs.
He said that although debt servicing as a percentage of GDP has fallen from nearly 100% to 60%, the country needs to further reduce the share of revenue allocated to debt servicing by focusing on expanding the tax base. emphasized.
He said: “We need to increase our sales to GDP ratio. In a country like Nigeria, the debt service to revenue ratio is about 60%. This means that a large portion of the country’s revenue goes towards debt service. What we are recommending to countries like Nigeria is that if they can improve their revenue mobilization, they can reduce the portion of their revenue that goes towards debt servicing.
“It is important to widen the tax base to raise more revenue and especially in Nigeria, it is important to put in place transparent and efficient systems and mechanisms that will help the government collect more revenue. It’s important.”
He called for the introduction of a transparent and efficient tax collection system and urged the government to improve fiscal management to generate more revenue.
The IMF’s Fiscal Monitoring Report released on Thursday also highlighted projections that Nigeria’s debt-to-GDP ratio, currently at 50.7%, will decline to 49.6% by 2025.
He noted that the country’s public debt includes overdrafts from the Central Bank of Nigeria and debts from the Asset Management Corporation of Nigeria.
“The Central Bank of Nigeria’s overdrafts and government deposits have almost offset each other, and the Nigeria Asset Management Corporation’s debt has been roughly halved,” the report noted.
Further forecasts show that the debt-to-GDP ratio will decline to 48.5% in 2026, 48.2% in 2027, and rise slightly to 48.8% in 2028 and 49.1% in 2029. are.
The IMF stressed that in parallel with increasing revenue, governments need to introduce targeted social safety nets to cushion the impact of inflation and environmental problems on vulnerable populations.
