The International Monetary Fund has said Nigeria spends high proportion of its revenue on debt servicing as a result of low revenue generation. Punch reports that the organisation said Nigeria spends more than 50 percent of its revenues on servicing debts, a situation that does not give room for other necessary expenses.
Legit.ng gathers that this was disclosed by the IMF senior resident representative and mission chief for Nigeria, Amine Mati, at the presentation of the Regional Economic Outlook for Sub-Saharan Africa-Capital Flows and the Future of Works in Abuja on Thursday, November 8.
According to him, Nigeria's debt servicing to revenue ratio is more than 50 per cent while it is about 10 percent for sub-Saharan Africa. Mati said: “Security issues are exacting a significant human toll in a number of countries. Debt to GDP ratio is increasing in the past five years. Public debt is diverting more resources towards debt servicing. “The interest rate has gone up to where they used to be around the year 2000 before the debt relief.
The adjustment has relied on spending compression rather than revenues mobilisation. Meeting the Sustainable Development Goals will require stronger growth and more financing. “Policies are needed today to create more jobs in the coming years.
Twenty million jobs are required every year in Sub-Saharan Africa to meet the SDGs. Job creation is complicated by uncertainty to which technology replaces labour."
Speaking at the event, director general of the Debt Management Office, Patience Oniha, said: “We are borrowing to be able to increase forex availability. The government needed to borrow in order to spend the country out of recession.”
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