The International Monetary Fund (IMF) has projected that for every N100 earned in 2021, Nigeria will be spending N60 servicing its fast-growing debts.
This was revealed in its latest report on Nigeria released on Monday.
According to the report between 2017 and 2020, the federal government in the last four years has spent an average of 66 percent of revenue as interest payment on its debts.
IMF says: in 2020, Nigeria spent 92.6 percent of its revenue servicing debt, up from 52.6 percent in 2019, 60 percent in 2018 and 58.4 percent in 2017.
A situation IMF warned needs a fundamental policy reset by the federal government to engendered macroeconomic stability that will help engender growth and employment.
“With high poverty rates, revenue mobilisation will need to rely on progressive and efficiency-enhancing measures, more so the current crisis provides a unique opportunity to break away from the past.”
“Socio-economic conditions have deteriorated, with rising food inflation, elevated youth unemployment, and mass protests in October 2020, and surveys show worsening food insecurity with a significant impact on the vulnerable,” IMF said in its report.
Nigeria’s level of public debt according to the Debt Management Office (DMO) stands at N31.009 trillion ($85.897bn) as of June 30, 2020.
IMF, therefore, noted that a significant revenue mobilisation will be needed in the medium term to reduce fiscal sustainability risks arising from low debt-servicing capacity.