Nigeria spends over 90% of revenue to service debt in 2022

The World Bank has revealed that Nigeria spends 96.3 percent of government revenue on servicing debt in 2022.

The global financial institution stated this in its Macro Poverty Outlook for Nigeria: April 2023 brief released over the weekend,

The report also highlighted that the fiscal deficit breached the stipulated limit for the federal fiscal deficit.

Part of the report reads: “The fiscal position deteriorated. In 2022, the cost of the petrol subsidy increased from 0.7 percent to 2.3 percent GDP.

“Low non-oil revenues and high-interest payments compounded fiscal pressures. The fiscal deficit was estimated at 5.0 percent of GDP in 2022, breaching the stipulated limit for federal fiscal deficit of 3 per cent.

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“This has kept the public debt stock at over 38 per cent of GDP and pushed the debt service to revenue ratio from 83.2 per cent in 2021 to 96.3 per cent in 2022.”

Also in the brief, the World Bank revealed that the cash scarcity created by the CBN’s naira redesign policy hampered the country’s economic growth and poverty reduction efforts.

It also projected that about 13 million Nigerians would become poor between 2019 and 2025.

It noted, “Nigeria is in a more fragile position than before the late 2021 global oil price boom. Growth and poverty reduction have further been affected by cash scarcity in the context of the Naira redesign.

“The economy is projected to grow by an average of 2.9 percent per year between 2023 and 2025, only slightly above the population growth rate of 2.4 percent. Growth will be driven by services, trade, and manufacturing. Oil production is projected to remain subdued in part because of inefficiencies and insecurity.”

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“With Nigeria’s population growth continuing to outpace poverty reduction and persistently high inflation, the number of Nigerians living below the national poverty line will rise by 13 million between 2019 and 2025 in the baseline projection.”