IMF Is Not Worried About Nigeria’s Debt - Adeosun
Nigeria’s debt has risen to 21.7 trillion in less than 3 years. Stakeholders in the economic sector appear concerned and have expressed it.
Part of the stakeholders who have expressed these concerns include the World Bank and the International Monetary Fund, IMF.
As a matter of fact, the two international institutions have repeatedly said they are concerned that Nigeria isn’t earning enough money to repay its mounting debts.
But this reality appears to not exist in the world of Nigeria’s Minister of Finance, Mrs. Kemi Adeosun, who has been reported to have said that the IMF is not worried about Nigeria’s debt profile.
Adeosun maintains that Nigeria has enough capacity to repay its debt obligations.
She explained that the government was not worried about the country’s rising debt profile as the debt to Gross Domestic Product ratio was still low compared to other countries.
Also Read: World Bank Is Worried For Nigeria
The minister explained that at 20%, Nigeria’s debt to GDP ratio was one of the lowest in sub-Saharan Africa compared to Ghana’s 68% and Ethiopia’s 50%.
She said Nigeria’s debt to GDP ratio was far lower than a country like China whose debt to GDP was at 250%.
“I have said this before and I am saying it again, there is no cause for worry. Nigeria’s debt to GDP ratio is 20% and it is one of the lowest in sub-Saharan Africa.
“We are pursuing a very measured strategy. We are running a budget deficit; the size of that deficit is coming down now. Nigeria is not among the countries that the IMF is worried about. We do have a challenge on debt service to revenue. That is because the interest cost is quite high and that is a function of two things.
“One is the fact that most of the debts were short-term; so, we are paying interests and compounding it. We have been refinancing treasury bills and issuing bonds. We have been refinancing treasury bills in the domestic market and replacing them with longer term debts in the international market. And this is reducing our cost of borrowing,” Adeosun said.
Also Watch: How To Build A Successful Nigerian Company Without Raising Money From Investors