The World Bank has said that Nigeria’s biggest fiscal challenge is weak revenue mobilization rather than excessive borrowing, urging the government to focus on boosting revenue generation to support sustainable economic growth.
Speaking during an interview on Channels Television on Friday, July 3, 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 center on improving government revenue rather than restricting 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 neighbors and many other countries,” he said. “Nigeria is in a very different situation from Ghana, for example, which is currently undergoing 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 all countries borrow. If you want to deliver results to people, the money available annually is not enough. So you borrow, deliver results, and that improves your ability to repay,” he said.
