IMF Questions Nigeria’s Capacity To Repay Loans
The International Monetary Fund (IMF) has cast doubts on Nigeria’s ability to repay its debts even as it called on the Federal Government to rack up revenues domestically.
IMF Senior Resident Representative and Mission Chief for Nigeria Amine Mati noted this on Monday at the public presentation of the Spring 2018 Issue of the Regional Economic Outlook for Sub-Saharan Africa.
According to Mati, “The number of countries in debt distress has increased. From six countries in 2014 to eight in 2015, to 10 in 2016, and today 15 countries. These are low-income economies.
“Now, I know the question that is going to come from here is: Where is Nigeria? Nigeria is not considered a low-income economy.
“Nigeria’s debt stock figure, which is 20 to 23 per cent of Gross Domestic Product, is still quite low by any standard. The issue is capacity to repay the debts. So, interest payment to revenue is an issue.”
On shoring up the country’s domestic revenue, he said, “There is a lot that can be done to increase revenue very quickly.”
He added that the country’s Value Added Tax rate had been quite low and that doubling the compliance on VAT from 25 to 50 per cent would increase the VAT ratio from 0.9 per cent of GDP to close to two per cent.
Nigeria’s debt stood at N21.73tn as of December 31, 2017, compared to N12.12tn as of June 30, 2015, according to the Debt Management Office.
