The IMF assures Nigerians that the country’s debt is moderate, not high risk, and emphasizes the importance of targeted government interventions. Nigeria’s public debt rose to N142.3 trillion due to exchange rate devaluation. Moreover, peak power generation reached a historic high of 6,003 MW, showcasing the government’s efforts to enhance electricity supply. Successful financial management and strategies are essential to sustain economic growth and stability.
The International Monetary Fund (IMF) has assured Nigerians that the country’s debt level is moderate and not at high risk, which was emphasized by Gita Gopinath, the IMF’s First Deputy Managing Director, during an interview. She recognized the economic challenges Nigeria faces but highlighted the importance of targeted social interventions by the government.
Nigeria’s public debt reached N142.3 trillion by September 30, 2024, a significant increase from N134.3 trillion in June 2024, attributed primarily to exchange rate devaluation. External debt saw a slight rise from $42.90 billion in June to $43.03 billion in September, demonstrating ongoing fiscal pressure.
A “moderate debt level” indicates that a country can manage its debts without severely compromising its ability to fulfill financial obligations, while allowing for some spending flexibility. Gopinath clarified that, although Nigeria’s debt is manageable, it is critical not to move towards a high-risk debt scenario.
The IMF’s assessment showed that 75% of Nigeria’s revenues are allocated towards interest payments, leaving limited funds for developmental initiatives. Therefore, enhancing domestic revenue through effective strategies becomes paramount to maintaining manageable debt levels. Gopinath also stressed the need for stabilizing the naira exchange rate through a tighter monetary policy.
During a meeting with Finance Minister Wale Edun, Gopinath discussed the necessity for Nigeria to increase domestic revenue, particularly by utilizing savings from the cessation of fuel subsidies. Enhanced administration through automation, closing tax loopholes, and improving general infrastructure were highlighted as mechanisms to bolster economic growth.
CBN’s role is also crucial, as Gopinath advised maintaining strict monetary policies to stabilize the currency and lower inflation. Successful stabilization should not rush, as history warns against premature declarations of victory in inflation control.
Gopinath acknowledged the economic issues Nigeria faces and reiterated the need for focused government interventions to support citizens amidst rising living costs. She mentioned the importance of enhancing fiscal data transparency to improve Nigeria’s credit profile and attract investments.
On the energy front, the Nigerian government announced its achievement of 6,003 megawatts (MW) in peak power generation, marking a historic high for the country. This achievement reflects ongoing reforms and the commitment to ensuring reliable electricity supply to boost economic growth.
Minister of Power, Adebayo Adelabu, highlighted the importance of further tariff reforms to regularize energy costs, which would help attract private sector investments. To continue this progress, the government must manage existing debt and financial shortfalls efficiently.
Adelabu emphasized collaboration among stakeholders to sustain these achievements and enhance the power sector’s role in driving economic development. He also established a planning committee for an upcoming conference of the National Council on Power (NACOP) to address pressing issues in the sector.
The International Monetary Fund has confirmed that Nigeria’s debt is at a moderate level and not classified as high risk, urging that disciplined economic policies are essential. To further enhance financial sustainability, Nigeria must improve domestic revenue Mobilization and streamline governmental expenditures. Alongside these financial strategies, Nigeria has achieved historic power generation levels, highlighting ongoing initiatives to stabilize and modernize the energy sector. Ultimately, collaborative efforts among stakeholders will be vital for maintaining these advancements and furthering Nigeria’s economic prospects.
Original Source: www.arise.tv
