Published 14 hours ago on December 12, 2022By Olalekan Fakoyejo
In 2023, Nigeria’s debt servicing will gulp 123.4 per cent of Federal Government’s revenue, the World Bank’s Lead Economist for Nigeria, Alex Sienaert, has projected, expressing the same concern as raised by Presidential candidate, Peter Obi.
Sienaert made it known in a presentation titled ‘Nigeria Public Finance Review: Fiscal Adjustment for Better and Sustainable Development Results.’ for the month of November.
World Bank also revised its debt servicing projection for 2022, stating that 100.2 per cent of Federal Government revenue would be gulped by debt servicing.
This is below the 102.3 per cent previously projected for the end of 2022 in the World Bank’s Africa’s Pulse report, which is a biannual analysis of the near-term macroeconomic outlook for the region.
The report, published in April and October during the World Bank/IMF Spring and Annual Meetings, had raised concerns over Nigeria’s public debt.
Ripples Nigeria had reported two days ago that Nigeria’s total debt stock rose to N44.06 trillion as of September 2022, according to the Debt Management Office (DMO), from N39.56 trillion at the end of last year.
Debt servicing to affect productive spending
In his presentation, Sienaert said debt servicing would not give room for productive spending, so borrowing was not the solution to Nigeria’s problem.
READ ALSO:World Bank President, David Malpass, addresses Nigeria’s debt restructuring claim
“Borrowing more is not the solution: debt costs are rising rapidly, squeezing non-interest spending,” he said, adding, “Debt servicing has surged over the past decade and is expected to continue increasing over the medium-term, crowding out productive spending.”
FG has significantly increased its borrowings, as the World Bank had revealed that in 2021, $9 billion was obtained from International Monetary Fund (IMF) credit and Special Drawing Rights (SDR), against $2.58 billion in 2010.
Also, the World Bank, in a report on ‘poorest countries eligible to borrow from the World Bank’s International Development Association (IDA)’ had stated that Nigeria and other low and middle-income economies were already at high risk of debt distress or already in distress.
Nigeria’s debt servicing worries Peter Obi
Aside from the World Bank, Obi, who is the Presidential candidate of Labour Party, had stated that the FG was spending beyond its revenue, stating in his manifesto that 116 per cent of government revenue was disbursed on debt servicing.
Obi said debt servicing overshooting revenue comes at a period tax contributions to gross domestic product (GDP) falls below Africa’s average ratio. Nigeria’s tax to GDP ratio is 6 per cent, falling short of the African average of 17 per cent.
According to the former Anambra governor, Nigeria’s debt-servicing ratio and debt to revenue ratio will drastically reduce if he’s elected as President in 2023 Presidential election, as his administration will implement radical economic policies
https://www.google.com/amp/s/www.ripplesnigeria.com/world-bank-echoes-peter-obis-concern-over-debt-servicing/%3famp
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You mean keep Africa poor Bank .

When you are big you are big abeg

Peter obi

Urchins will you please update your brains for once

PO keeps saying it, the Igbos and other well meaning Nigerians keep saying it but APC and Agbado urchins are bent on burning this country down! They're filled with corn and bulaba!!!

Peter Obi is the man Nigeria needs at this critical time when the nation is in dire need of good governance. Good governance is NOT hard but past governments like PDP and now useless APC has made everything appear elusive. Over the past two decades, a thin consensus has been emerging on what countries should do to foster economic development & growth. The consensus revolves around 3 building blocks; Human Capital Development, "Needed" Infrastructure and Leadership by example. Today, Peter Obi is head & shoulders above all with regards to the awareness of the 3 building blocks needed to foster economic growth for a country - all thanks to his updated Education and sound knowledge of world affairs. When he talks about the feat made by countries such as Singapore, Thailand etc.. PO used this framework as a governor and he is ready to use it at the national level. Public servants should be focused on serving the public - not any special interest group, & good governance should be an expectation - not an exception. Not surprised that the FIRST building block of the global framework for economic growth is HDI. Human capital fuels economic growth & contributes significantly to higher labor productivity. It's also crucial for innovation & the absorption of ideas from around the world. No country can grow without an accompanying commitment from its govt to investing in human capital. Aside PO, none of the major contenders has boldly profess his commitment to a principle of PEOPLE DEVELOPMENT then infrastructure. Aside PO, none of the main contenders has spoken against why young graduates with laptops are profiled criminals when we should invest in them more.

Obi to the rescue