World Bank country director for Nigeria Shubham Chaudhuri says Nigeria has a revenue issue, not a debt problem.
Speaking at the 26th edition of the Nigerian Economic Summit (#26) on Monday, Chaudhuri said the COVID-19 pandemic is all about helping Nigeria help itself.
He said the World Bank could not fill Nigeria’s fiscal gap alone as a lot of what was needed to be done by the Nigerian government was required prior to the pandemic.
Nigeria’s domestic and foreign debt profile is surging, reaching N31.009 trillion as of June 30, 2020, according to the Debt Management Office (DMO). The World Bank and the International Monetary Fund (IMF) have both said that the debt is not a problem as it is still within the threshold of 30-40 percent of GDP. However, Nigeria’s debt service in the second quarter was 71 percent as against 99 percent in the first quarter, and many analysts do not see this as sustainable.
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Moreover, government revenue has been down due to the slowing economy and poverty, including leakages across many states. The crude oil provides 70 to 80 percent of Nigeria’s revenue, but oil prices have been down since 2016. Brent Crude price was $45.80 per barrel as of 1.41 pm on Monday. Coronavirus has worsened the country’s profile, plunging the country into a second recession in four years.
“Nigeria stands out compared to other countries impacted by the pandemic. It suffered multiple shocks due to the decline in oil prices and a decrease in remittances that did not necessarily affect some other African countries,” Chaudhur
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