The World Bank has projected a 123.4% deficit from the country’s revenue in 2023 as a result of debt servicing.
The international financial institution made this assertion via its Lead Economist for Nigeria, Alex Sienaert during a presentation titled: ‘Nigeria Public Finance Review: Fiscal Adjustment for Better and Sustainable Development Results.’ for the month of November.
The institution also reviewed its debt servicing projection for 2022 which it published in a report, from 102.3% to 100.2% of the nation’s revenue.
The report was published in April and October during the World Bank/International Monetary Fund Spring and Annual Meetings.
Ripples Nigeria had reported two days ago that Nigeria’s total debt stock rose to N44.06 trillion as of September 2022, according to the Debt Management Office, from N39.56 trillion at the end of last year.
In his presentation, Sienaert said debt servicing would not give room for productive spending, so borrowing was not the solution to Nigeria’s problem.
He said, “Borrowing more is not the solution: debt costs are rising rapidly, squeezing non-interest spending.
“Debt servicing has surged over the past decade and is expected to continue increasing over the medium-term, crowding out productive spending.”
FG has significantly increased its borrowings, as the World Bank had revealed that in 2021, $9 billion was obtained from IMF credit and Special Drawing Rights, against $2.58 billion in 2010.
Also, the World Bank, in a report on ‘poorest countries eligible to borrow from the World Bank’s International Development Association had stated that Nigeria and other low and middle-income economies were already at high risk of debt distress or already in distress.