Nigeria’s debt to GDP ratio is now at a worrisome level having broached 21.30 per cent of GDP, leading the International Monetary Fund (IMF) to caution against servicing of these debts as unsustainable.
Tradingeconomics.com has it that Nigeria recorded a government debt equivalent to 21.30 per cent of the country’s Gross Domestic Product in 2017. Government Debt to GDP in Nigeria averaged 32.42 per cent from 1990 until 2017, reaching an all time high of 75 per cent in 1991 and a record low of 7.30 per cent in 2008.
Speaking at a press conference recently, IMF’s Assistant Director, Fiscal Affairs Department, Catherine Pattillo, described the country’s debt to revenue ratio, which she put at 63 per cent, as “extremely high.”
The IMF therefore, encouraged Nigeria to look more inwards and generate revenue instead of dependence on loans.
She, therefore, recommended that in line with the IMF staff report on Nigeria, the Fund would want to see increases in tax rates and collection capacity to help reduce government’s budget deficit while financing key development projects.