₦airaland Forum

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 moderate by international standards and is significantly different from countries experiencing debt distress.

“From our assessment, Nigeria doesn’t have a high indebtedness problem; it has a low revenue problem,” Verghis said.

He explained that Nigeria’s debt-to-GDP ratio is lower than that of many comparable countries, stressing that concerns should focus on improving government revenue rather than limiting borrowing.

“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. Nigeria is in a very different situation than Ghana, for example, which is going through a debt restructuring.”

Verghis defended government borrowing as a necessary tool for financing long-term investments that stimulate economic growth and improve living standards.

“Nigeria borrows for the same reasons that all countries borrow. If you want to deliver results to people, the money available on an annual basis is not enough. So you borrow, deliver results, and that improves your ability to repay,” he said.

He cited the expansion of electricity access as an example, noting that providing power to about 32 million Nigerians requires substantial upfront investment.

“To be able to connect and provide energy to 32 million Nigerians, Nigeria needs to borrow money now. But with increased access to energy, the country will become wealthier and better positioned to repay the loans,” he added.

The World Bank official, however, warned that low government revenue poses a greater threat to Nigeria’s fiscal sustainability than its current debt level.

“Nigeria’s debt is not particularly high, and in fact, it’s quite moderate by international standards. Its revenues are very low by international standards, and unless those revenues are raised, it will not be able to pay back debt,” Verghis said.

According to him, strengthening revenue mobilisation would enable the government to increase investments in infrastructure, healthcare, education and other sectors that drive job creation, improve human capital and reduce poverty over the long term.

The remarks come as 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.

“No nation ever grew more prosperous by taxing its citizens beyond their capacity to pay.” - former British Prime Minister Margaret Thatcher[/b]

Racoon:
What remains now is to goad the govt to start taxing people to breath air, eat good or any way possible. Wicked souls!

Sheuns:
How do you intend they generate revenue when over 60% of the population have been thrown into poverty.

TopBanter:
Were they thrown into poverty overnight, under Tinubu you hate and prejudiced against, or the failure of previous Nigerian Presidents and heads of State over the past 6 decades or so?

The North, for example, has people who have the worst human development index in the world.

You want to blame that on Tinubu as well and not Northern leaders at all levels given that Awolowo liberated Yorubas with free education decades ago while the North, as we speak, endure with the Almajiri system that perpetuates illiteracy, dependency and Islamic radicalisation?

TopBanter:
Were they thrown into poverty overnight, under Tinubu you hate and prejudiced against, or the failure of previous Nigerian Presidents and heads of State over the past 6 decades or so?

The North, for example, has people who have the worst human development index in the world.

You want to blame that on Tinubu as well and not Northern leaders at all levels given that Awolowo liberated Yorubas with free education decades ago while the North, as we speak, endure with the Almajiri system that perpetuates illiteracy, dependency and Islamic radicalisation?

Racoon:
Chai! The taxation slavemasters are here with their voodoo neck-constricting economic policies again even with the many evil taxation policies of the current govt.

This simply means that the economically clueless & rudderless govt with impulsive urge to borrow for any economic challenge can continue to borrow to meet revenue target.

Meanwhile a staggering amount of the generated revenues are being used to service debts. Not debt payment.

seunmsg:
I have said this severally but very ignorant folks attacked me. Now that it is coming from World bank, I hope they get better understanding. Even without corruption, Nigeria cannot develop to become a first world country with our very ridiculously low budget that we can't even fund. Since 2024, we have been unable to fund our annual Federal Government budget.

Sheuns:
Tinubu said he has the solutions to Nigeria’s problems.

He said he can solve them. You making excuses for him doesn’t exempt the fact that he had thrown more Nigerians into poverty than those before him.

Have you lived in the north before?

TopBanter:
Were they thrown into poverty overnight, under Tinubu you hate and prejudiced against, or the failure of previous Nigerian Presidents and heads of State over the past 6 decades or so?

The North, for example, has people who have the worst human development index in the world.

You want to blame that on Tinubu as well and not Northern leaders at all levels given that Awolowo liberated Yorubas with free education decades ago while the North, as we speak, endure with the Almajiri system that perpetuates illiteracy, dependency and Islamic radicalisation?

nairalanda1:
The problem with that assertion is that you are in essence arguing for the tinubu government to keep taking loans.

This our tax to gdp is less than the African average, most of the rich do not pay taxes, most people working in the informal sector do not pay taxes, and our country is reliant on oil, and other resources, whose prices we cannot control or set, therefore if we wanted to raise our oil prcies to bring in more revenue for the country...as Ghana did for its cocoa one time...buyers will go to cheaper alternatives...as Ghana found out.

At the end of the day, nations grow by their leadership making hard choices (before you start, tinubu is not making hard choices, regardless of what his propaganda kompanie would have you think). We need revenue urgently for a host of things...including funding our budget, funding stuff like railways, and infrastructure. Yet we do not collect enough revenuye, waste the litte we collect on corruption and stealing...which by the way the people you want us to vote for were also involved in, and are likely to continue when they displace tinubu in 2027, and we do not have a working industrial sector because somehow you guys beilieve that a company where 80% of the customers are paying below production price can somehow miraculously perfrom at top level.

One thing I don't like about you Nigerians is that y'all are not serious. You and helinues now, when tinubu leaves, Helinues will be saying what you are saying, and you will be telling us now that government has to charge high taxes and make tough choices. Right.

Anyway, the World bank is right. Revenue is shit. VAT cannot fund our budget nor can all the tiny taxes collected every day that people come and tell me about. I've done the math, it cannot do much for the budget. Even if we cut leakages, it won't do much of anything. Cut government costs, nothing go happen. We need a flat income tax for everyone, regardless of status, rich paying more, and we need to end useless subsides on electricity so that at least we can effing have a proper industrial sector that produces goods for export.

But the way you guys chant quasi marxist jokes on this site, I doubt we go see change.

You people do not want taxes, eh? All right , make we dey borrow, and make people dey look as the leaders continue to steal (yes tax payment tends to make people more incentivised to question their government, as seen in saner climes). Don't complain about the debt then.


And yes, I am voting tinubu out, he has failed. But that does not effing stop me from seeing reality.