Nigeria’s rising public debt remains worrisome, unsustainable - World Bank
In its latest Nigeria Economic Update, the World Bank observed that low revenue posed a challenge to Nigeria’s ability to sustain its debt burden.
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World Bank worries about Nigeria debt
This is not the first time the World Bank is raising concerns over Nigeria’s rising debt profile. It’s been constant on its rather over the past 2 years.
Now, they are warning again that the country’s public debt remains unsustainable. This is coming on the heels of President Muhammadu Buhari’s request to the National Assembly for the approval to borrow an additional $29.96 billion.
Nigeria’s total public debt, which stood at N21.73tn as of December 31, 2017, rose to N25.7 trillion as of June 30, 2019, according to data from the Debt Management Office.
The Federal Government reportedly deployed 54.2 per cent of all its earned revenue to debt service in the first half of 2019.
But in its latest Nigeria Economic Update, the World Bank observed that low revenue posed a challenge to Nigeria’s ability to sustain its debt burden.
“The ratio of public debt to GDP is relatively modest at around 20 per cent, but debt sustainability is challenged by low revenues.
“Low domestic revenue raises questions about debt sustainability. The interest payments on public debt are high and rising due to growing debt stock and because of high-interest rates in the domestic debt market and the high proportion of domestic debt,” the bank observed.
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