The International Monetary Fund ( IMF) Thursday, listed Nigeria among eight African countries on its debt distressed category following the failure of their fiscal consolidation to positively impact the citizens.
Abebe Aemro Selassie, Director of the IMF’s African Department, who gave the hint at a briefing he jointly held with Nigeria’s Budget and Planning Minister, Senator Udoma Udo Udoma, on the sidelines of the on-going IMF meetings in Indonesia, noted that African debt trap is fast becoming a heavy burden as all growth indicators are heading south even as he said most of the continent’s oil exporting countries are engrossed in the debt quagmire.
According to him, the eight countries, including leading oil producing nations, urgently need to improve their fiscal consolidation before their conditions become irredeemable.
The verdict comes as Nigeria’s total debt rose to N72trillion( $42billion) as at 2018 from $40billion in 2015.
He therefore called for stronger fiscal adjustments and management of capital inflows currently standing at over $60billion to mitigate the consequences of the debt trap. To overcome the debt vulnerability, Abebe, called for more economic diversification, improved trade and financial integration and support for private sector investments.
He also called Nigerian government to build its foreign exchange reserve buffers and allow more flexibility in the management of the foreign exchange market, as well as raise the level of its tax revenues.
Nigeria’s budget and planning minister, Senator Udo Udoma, who represented the Nigerian government did not have much to say on the Federal Government’s long term plans and activities to reverse the trend which IMF described as largely very appalling.
In his response, Udoma said he was in agreement with the IMF verdict on the country’s economy, but blamed the poor performances on disruptive activities recorded in oil production in the Niger Delta and the incessant herdsmen-farmers clashes that distorted agricultural production in the northern part of the country.
“I agree with the IMF position on growth in Africa and Nigeria’s growth trajectory. Nigeria had projected 2.9 per cent, from 0.7 per cent last year , and we recorded 1.9 per cent. This was due to changes in oil production and the farmers-herdsmen clashes that disrupted farmers production in parts of the country.”
He said the country’s direction was fine particularly with the implementation of the Economic Recovery and Growth Plan (ERGP).
He said the country has also worked to reduce inflation from over 18 percent to about 11. 2 per cent, while the foreign exchange reserves have grown to over $45billion from about $26billion at the inception of the administration.
“In Nigeria’s ERGP, we target to create about 15 million jobs by 2020. We intend to achieve this principally through stimulating the private sector.
Our aim is to make Nigeria a more investment friendly place, a more attractive place for people to do business….”
We conducted sector specific labs, what we referred to as the ERGP Focus Labs, to bring potential investors and government officials together to seek to remove the bottlenecks and impediments impeding investment projects.
We identified over $22 billion of potential investments which could be unlocked, if we can remove some of these impediments.” Udoma said
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