Juliet Damilola
The President of the African Development Bank, Dr Akinwumi Adesina, has urged Nigeria to decisively tackle debt challenges, saying that debt service costs and poor foreign exchange policies are the major setbacks to the country’s economic growth.
The AFDB president gave this advise during the Mid-Term Ministerial Performance Review Retreat, which was held virtually and physically at the Presidential Villa on Monday.
He emphasised the need to fix the country’s economic structure.
According to him, Nigeria must decisively tackle its debt challenges. The issue is not about the debt to GDP ratio as Nigeria’s Debt to GDP ratio at 35 percent is actually still moderate.
He said the big issue is how to service the debt and what that means for resources for domestic investments needed to spur faster economic growth.
“The debt service to revenue for Nigeria is at 73 percent. Things will of course improve as oil prices recover, but the situation has revealed the vulnerability of the Nigerian economy.
“To have an economic resurgence, we need to fix the structure of the economy and address some basic fundamentals. Nigeria’s challenge is revenue concentration.”
He asked for the removal of structural bottlenecks restricting productivity and revenue-earning potential.
“What is needed for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and revenue earning potentials of the huge non-oil sector,” he added.
The AfDB president further advised the government to boost productivity in the non-oil sector with the right fiscal and macroeconomic policies.
The debt servicing rose to N2.9tn, gulping 74 per cent of the country’s revenue from January to August 2021.