World Bank: Nigeria’s main fiscal challenge is low revenue, not high debt

The World Bank has said Nigeria’s biggest fiscal challenge is weak revenue mobilisation rather than excessive borrowing, urging the government to increase revenue generation to support sustainable economic growth. Speaking on Channels Television on Friday, World Bank Country Director for Nigeria, Mathew Verghis, said Nigeria’s debt profile remains moderate by international standards and is different […] The post “Nigeria’s Debt Is Moderate, Low Revenue Remains Major Challenge” – World Bank appeared first on Information Nigeria.

The World Bank has said Nigeria’s biggest fiscal challenge is weak revenue mobilisation rather than excessive borrowing, urging the government to prioritise efforts to boost revenue generation to support sustainable economic growth. Speaking during an interview on Channels Television on Friday, the World Bank Country Director for Nigeria, Mathew Verghis, said Nigeria’s debt profile remains […] The post Nigeria’s challenge is low revenue, not high debt – World Bank appeared first on Vanguard News.

 Mathew Verghis, the World Bank’s country director for Nigeria, says Nigeria’s biggest fiscal challenge is weak revenue mobilisation rather than excessive debt.   Speaking during an interview on Channels Television on Friday, Mathew Verghis, the World Bank’s country director for Nigeria, said Nigeria’s debt profile is not the primary concern, stressing that increasing government revenue should be the country’s priority.   “From our assessment, Nigeria doesn’t have a high indebtedness problem, it has a low revenue problem,” Verghis said.   He said the country’s debt level, relative to the size of its economy, is lower than that of many peer countries and should not be compared with countries facing debt distress.     “When we looked at the numbers, Nigeria is a moderately indebted country, meaning it has less debt relative to its economy than most of its neighbours and many other countries,” he said.   “Nigeria is in a very different situation than Ghana, for example, which is going through a debt restructuring.”   Verghis said borrowing is necessary to finance investments whose benefits materialise over time, arguing that countries often raise debt to fund projects that improve economic growth and living standards.     “Nigeria borrows for the same reasons that all countries borrow. If you want to get results, if you want to deliver results to people, then the money that you have on an annual basis is not enough,” he said.   “So you borrow, you get results, and that will improve your ability to pay back.”   For instance, Verghis said expanding energy access to millions of Nigerians requires significant upfront investment but would ultimately strengthen the economy.   “To be able to connect, to give energy to 32 million Nigerians, Nigeria needs to borrow money now,” the World Bank official said.     “But that money, with that increased access to energy, Nigeria will become a wealthier country, and it’ll be then possible to pay back.”   Verghis said Nigeria’s immediate priority should be to increase government revenue, warning that low revenue, rather than debt levels, poses greater risks to the country’s public finances.   “Nigeria’s debt is not particularly high, and in fact, it’s quite moderate by international standards,” the country director said.   “Its revenues are very low by international standards, and unless those revenues are raised, then it will not be able to pay back debt.”   Verghis said improving revenue collection would enable the government to invest more in infrastructure and human capital, create better jobs and reduce poverty over the long term.   The World Bank recently unveiled a new six-year country partnership framework for Nigeria, which places job creation at the centre of its support for the country through investments in infrastructure, healthcare, agriculture, and digital connectivity.