Nigeria’s biggest fiscal challenge is weak revenue mobilisation rather than excessive debt, according to Mathew Verghis, the World Bank’s country director for Nigeria.
Verghis said Nigeria is a “moderately indebted country” with less debt relative to its economy than most neighbours and many other countries.
He stated: “Nigeria doesn’t have a high indebtedness problem; it has a low revenue problem.” He argued that borrowing is necessary to finance investments whose benefits materialise over time, such as expanding energy access to 32 million Nigerians.
He warned that unless revenues are raised, Nigeria will not be able to repay debt.
Nigeria’s debt-to-economy ratio is moderate, not alarming
The real risk is low government revenue, which constrains spending
Borrowing for infrastructure and energy expansion is necessary and productive
Revenue reform is critical for long-term fiscal sustainability
Without revenue growth, debt repayment will become increasingly difficult
Nigeria must prioritise revenue mobilisation reforms. The World Bank’s new six-year partnership focuses on job creation, infrastructure, healthcare, and agriculture.
