Nigeria servicing debt with more than 50% revenue – IMF





November 9, 2018
Everest Amaefule, Abuja


The International Monetary Fund on Thursday painted the precarious situation of the nation’s economy in particular and Sub-Saharan Africa’s, in general, going by how much the country and the region spend on debt servicing.

According to the Breton Woods financial institution, Nigeria spends more than 50 per cent of its revenues on servicing debts, a situation that does not give room for other necessary expenses.


Speaking at the presentation of the Regional Economic Outlook for Sub-Saharan Africa – Capital Flows and the Future of Work in Abuja on Thursday, Senior Resident Representative and Mission Chief for Nigeria, African Department, Amine Mati, put Nigeria’s growth rate for 2018 at 1.9 per cent.



Mati said that although Nigeria’s debt to Gross Domestic Product remained low at between 20 and 25 per cent, the country spent a high proportion of its revenue on debt servicing as a result of low revenue generation.

For Nigeria, he added, the debt servicing to revenue ratio was more than 50 per cent while for sub-Saharan Africa, the rate was about 10 per cent; a figure he said was too high and reminiscent of what the region went through in the period following debt relief at the beginning of the 21st century.


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.”


The IMF top-notch said that the sub-region needed to create 20 million jobs every year and added that the situation was even more precarious with the Fourth Industrial Revolution lurking around.

“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,” he said.


Speaking at the event, Director General of the Debt Management Office, Patience Oniha, stated that it was important for the government to borrow especially given the nation’s low revenue generating capacity.


She contended that without sufficient revenue and with the recession that the country found itself between 2016 and 2017, the government had no option but to borrow and spend the country out of recession.


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.”

She disclosed that the government had proposed to borrow N1.5tn in the 2019 fiscal year, adding that borrowing had reduced as the nation was now out of recession.

Justifying this viewpoint, Oniha said that in 2016, the Federal Government borrowed N2.5tn which was approved by the National Assembly while it proposed to borrow N1.64tn in the current financial year.


In 2019, she added, the proposed debt of N1.5tn had gone further down. She added that the government had taken steps to diversify the economy and increase tax collection which she said was lower than in most countries of the Economic Community of West African States.

The DMO boss differed with the opinion of a questioner who argued that the infrastructure in the country had been decaying despite increased borrowing in the last three years.


However, a Non-Governmental Organisation, Social Action, has berated the government for its inclination towards borrowing.

In a statement made available to our correspondent in Abuja on Thursday, Head, National Advocacy Centre, Social Action, Nigeria, Vivian Bellonwu-Okafor, said that the inclination to borrow by the government showed cluelessness.

https://punchng.com/nigeria-servicing-debt-with-more-than-50-revenue-imf/?fbclid=IwAR3geFT0icRtCXk0cixFVNnL5Zl_XcPF_65lSkONOnTtnsAxPW_KechVdoM

This is what APC have achieved in 3 years.
- 50% of revenue dedicated to debt servicing
- Budget padding and repadding
- recession and economic woes
- capital of world poverty
- lopsided fight against corruption
- double digit inflation with single digit GDP
- total eradication of middle class
- 13million job loss and still counting
- delivering propaganda instead of value creation
- destroying democratic values and institution
- vote buying from destitutes created by same government in name of IDP camps
- elevating failure and rewarding idiocy
- the most purposeless and uncoordinated team to have governed Nigeria
- creating a divisive country and creating volatility through herdsmen/farmer's clash
- unleashing and arming terrorists across the length and breath of the nation
- making Nigeria the worst place to live on planet earth

With all these and many more, they created a horde of zombies whose mental faculties have relapsed into nothingness! Then I asked, what motivates them?

Ignorance and blind followership!

Watch as they will come calling me names! Confused lot!

APC a disaster to Nigerians

Continue, Mr Buhari. We are solidly behind you... Pushing you to Daura.

Mati said that although Nigeria’s debt to Gross Domestic Product remained low at between 20 and 25 per cent, the country spent a high proportion of its revenue on debt servicing as a result of low revenue generation.

For Nigeria, he added, the debt servicing to revenue ratio was more than 50 per cent while for sub-Saharan Africa, the rate was about 10 per cent; a figure he said was too high and reminiscent of what the region went through in the period following debt relief at the beginning of the 21st century.

“....We are borrowing to be able to increase forex availability. The government needed to borrow in order to spend the country out of recession.”

She disclosed that the government had proposed to borrow N1.5tn in the 2019 fiscal year,

Can you imagine! Another low one for this clueless moribund government. Yet it's still borrowing (despite the supendious claim of sizeable amount of recovered looted funds,spurious IGRs, saving from TSA etc) to pay backlog of interests accruing from these debts.

IMF is not BMO/BMC dishing out info.Pls to rescue Nigeria from these fraudsters is a task for those who have this country @ heart.

Good news , very soon we will divide this zoo. When everything finally crash.

The Legislature needs to check the excesses of the Executive especially as it concerns external borrowing.

Our revenue generating capacity is not low, we have a high rate of political robbery. Add to that political wastage.

where at thou come sing praises for Bubu na

this news cant be true....

it can be only true if we have as much debt as america....

Plz this govt should stop borrowing b4 the kill this country look at what hv best borrowed & nothing to show for it

B - Bringing
U - Unbearable
H - Hardship
A - And
R - Raw
I - Incompetence

Buhari is running a directionless artificial economy that will take Nigeria another 50years to recover from.

When you add the revenue used in stabilizing the already inflated dollar exchange rate it is crystal clear that Nigeria is running a faulty economic foundation.

This is punitive against Nigerians. It is not our debt that is high, it is lack of proper tax administration. Wait for Buhari's second term, a lot of your indiscipline, slackness and dross will be pressed out.
The idiotic country that PDP left will change by fire or force. Nigeria is one of the lowest indebted countries in terms of debt to GDP ratio ..unfortunately it is also the only country where people don't want to pay correct taxes..or pay taxes at all.Nigerias revenue profile should be close to $80bn if you add oil revenue and LNG. Taxes should bring in at least $45bn. Don't worry, Buhari will win second term and the country will grow up. Atiku spent N4bn on PDP Presidential primaries but paid only N20m tax abi?.
U na go hear am. The Canada and US you dunces run to, is that how they live?.
The most annoying thing is the way young guys bred in Nigeria just accept sub-optimality just because they don't know and their minds are too undeveloped to even reason. You guys will see. GOD has his ways different from man and when he acts we shut up.

Olodo everywhere Up there
Pmb is servicing debts acquired by obasanjo and Jonathan.
Most of them have matured yet no project on ground. The past govt borrowed to pay salaries and service debts, where do they expect pmb to get the money to service the debts.
Had we borrowed to construct rail, roads or industries by now we should have gotten enough to repay.
Those of you spilling trash shud keep quiet if you have nothing reasonable to write

henchamb:
Olmanaging ywhere Up there
Pmb is servicing debts acquired by obasanjo and Jonathan.
Most of them have matured yet no project on ground. The past govt borrowed to pay salaries and service debts, where do they expect pmb to get the money to service the debts.
Had we borrowed to construct rail, roads or industries by now we should have gotten enough to repay.
Those of you spilling trash shud keep quiet if you have nothing reasonable to write

is pmb not borrowing also? He has borrowed more than the PDP 16years put together .
Where is his finance minister today?
A dullard is a dullard
He will do well managing cows than the economy. You don't have anything to say just kwayet

Buhari-no-economics
Where is that former minister of finance with forged NYSC certificate sef

And the remaining 50percent is used to fund the expensive lifestyles of Buhari govt officials and Fulani expansionism

Buhari has completely buried Nigeria


And to think that some lazy and selfish youth would want this state of affairs to continue for another 4yrs just so they can continue to earn 30k blood money!

Did they not tell us that Fowler and Customs Service and JAMB have generated unprecedented revenue since Nigeria's amalgamation?

Lai Mohammed and Femi Adesina should quickly pull data from the CBN to let IMF know that Nigeria is now generating trillions of dollars from sales of JAMB forms.

Ipob news...

Bubu is an economic disaster.

SternProphet:
This is punitive against Nigerians. It is not our debt that is high, it is lack of proper tax administration. Wait for Buhari's second term, a lot of your indiscipline, slackness and dross will be pressed out.
The idiotic country that PDP left will change by fire or force. Nigeria is one of the lowest indebted countries in terms of debt to GDP ratio ..unfortunately it is also the only country where people don't want to pay correct taxes..or pay taxes at all.Nigerias revenue profile should be close to $80bn if you add oil revenue and LNG. Taxes should bring in at least $45bn. Don't worry, Buhari will win second term and the country will grow up. Atiku spent N4bn on PDP Presidential primaries but paid only N20m tax abi?.
U na go hear am. The Canada and US you dunces run to, is that how they live?.
The most annoying thing is the way young guys bred in Nigeria just accept sub-optimality just because they don't know and their minds are too undeveloped to even reason. You guys will see. GOD has his ways different from man and when he acts we shut up.

if any of ur relatives have travelled out of this country before then he shares in the duncehood.

dont forget buhari is outof the country now so he is a chief dunce

[s]

Reinvented:
This is what APC have achieved in 3 years.
- 50% of revenue dedicated to debt servicing
- Budget padding and repadding
- recession and economic woes
- capital of world poverty
- lopsided fight against corruption
- double digit inflation with single digit GDP
- total eradication of middle class
- 13million job loss and still counting
- delivering propaganda instead of value creation
- destroying democratic values and institution
- vote buying from destitutes created by same government in name of IDP camps
- elevating failure and rewarding idiocy
- the most purposeless and uncoordinated team to have governed Nigeria
- creating a divisive country and creating volatility through herdsmen/farmer's clash
- unleashing and arming terrorists across the length and breath of the nation
- making Nigeria the worst place to live on planet earth

With all these and many more, they created a horde of zombies whose mental faculties have relapsed into nothingness! Then I asked, what motivates them?

Ignorance and blind followership!

Watch as they will come calling me names! Confused lot!

[/s]

Here is how much your beloved Poverty Developers PDP left behind that remains the bulk of what APC is grappling with

[s]

porka:
Did they not tell us that Fowler and Customs Service and JAMB have generated unprecedented revenue since Nigeria's amalgamation?

Lai Mohammed and Femi Adesina should quickly pull data from the CBN to let IMF know that Nigeria is now generating trillions of dollars from sales of JAMB forms.

[/s]

Your PDP and thieves let behind $63 Billion behind despite having record revenue from oil sales. It is not hard to see why we as much as fifty percent on servicing debt.

Besides revenue made from FIRS and Customs are shared amongst the three tiers of government

lonecatt:
is pmb not borrowing also? He has borrowed more than the PDP 16years put together .
Where is his finance minister today?
A dullard is a dullard
He will do well managing cows than the economy. You don't have anything to say just kwayet

How do u want him to fund infrastructure and take the country out of recession if not to borrow. The country debt doubled btw 2010 and 2014 despite earning highest revenue from oil without nothing to show for it except abandoned project everywhere. The ones the mumu party have bin claiming to have initiated..

Oblang:


How do u want him to fund infrastructure and take the country out of recession if not to borrow. The country debt doubled btw 2010 and 2014 despite earning highest revenue from oil without nothing to show for it except abandoned project everywhere. The ones the mumu party have bin claiming to have initiated..

They are blind to see the infrastructural development around them

When you had kemi (finance minister) capable of forgery and a president without education.... What actually was Nigerians expecting......

Watch how these e- rats on 30k salary will litter here with factless figures and throw jab at Jonathan/PDP silly things!

henchamb:
Olodo everywhere Up there
Pmb is servicing debts acquired by obasanjo and Jonathan.
Most of them have matured yet no project on ground. The past govt borrowed to pay salaries and service debts, where do they expect pmb to get the money to service the debts.
Had we borrowed to construct rail, roads or industries by now we should have gotten enough to repay.
Those of you spilling trash shud keep quiet if you have nothing reasonable to write

Lol.....

Did Buhari borrowed at all?

Please tell us d following:
How much did OBJ borrow?

How much did GEJ borrow?

How much has Buhari borrowed?