The representative of the IMF’s president at the Sub-Saharan Africa Regional Economic Outlook in Abuja, Mr. Ari Aisen revealed that Nigeria is currently serving debts from 89% of its current revenue. And in 2022, the number is set to increase to 92.6% of the revenue generated.

Driving the news 
The International Monetary Fund (IMF) also projected that the continent’s most populous nation would spend almost all its revenue generated on repaying loans by 2026. 

Other worthy point 

  • Mr. Ari Aisen cited factors including insecurity and poor Covid-19 vaccination as being the major contributors to the country’s challenging economy, stating that Nigeria received $6.8 billion facilities from the Fund in 2020 and $3.4 billion in Special Drawing Rights (SDR). And an extra loan of $3.4 billion. 
  • The IMF official also warned that the continuous payment of fuel subsidy averaging N500 million monthly could amount to N6 trillion at the end of 2022.
  • He lamented that although Nigeria could not capitalize on the current high global oil prices, he hoped that Dangote’s refinery could ease the subsidy burden on the country. 

What they are saying 
The ex-governor of Central Bank of Nigeria (CBN) and former Emir of Kano, Muhammadu Sanusi II speaking in Abeokuta, Ogun State, on Tuesday, projected that considering the situation of the country, more economic challenges lie in 2023 as the country is running on extra time. 

What you should know 

  • The Nigerian Senate in April granted President Muhammadu Buhari’s loan request of N4 trillion for the payment of fuel subsidy for the year 2022. 
  • Nigeria’s debt currently should rise to N43.56 trillion as the Nigerian Senate granted a fresh N4 trillion loan request. This means President Buhari loaned over 200% or N25.168 trillion of Nigeria’s debt loaned in his 7 years’ administration. 
  • If no drastic change occurs, Nigeria, like other African countries in similar situations, would suffer a debt servicing crisis in which all the revenue generated would be used for servicing debt. 
  • The president of the World Bank Group, David Malpass, had warned Nigeria against paying subsidies as the country can spend the money on other sectors of the economy.
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