DMO Faults IMF On Nigeria’s Debt Sustainability Report

The Debt Management Office (DMO) has faulted the projection of the International Monetary Fund (IMF), a multilateral lender that Nigeria might spend over 92 per cent of its revenue on debt servicing in 2022.

The IMF, which made the projection in its 2021 Article recently published, also estimated the 2021 debt servicing-to-revenue ratio at 85.5 per cent. It, however, estimated the debt-servicing-to-consolidated revenue (total revenues of the government and its agencies) for 2021 and 2022 at 29 per cent and 32.8 per cent, respectively.

The DMO, in a statement by its Director-General, Mrs Patience Oniha, faulted the IMF report and a similar one by foremost Pan-African Credit Rating Agency, Agusto & Co. She said that both reports failed to consider the challenges experienced by Nigeria in recent times.

“There were challenges such as two recessions, sharp drop in revenues and security challenges. Even more, the analyses do not acknowledge the improvements in infrastructure which have been achieved through borrowing, as well as, the strong measures by the Government to grow revenues,” she said.

She reiterated the fact that the Federal Government was already implementing policies towards increasing revenues and developing infrastructure through Public Private Partnership arrangements, both of which will improve debt sustainability. Read: Finance Minister Faults Obaseki on N60 Billion Cash Prints

She noted that the Federal Government had active and regular engagements with the IMF on borrowing and debt management. The DMO had, however, explained that the country’s total debt of 92.9 billion dollars and debt to Gross Domestic Product (GDP) ratio of 35.51 per cent were within sustainable limits.