The IMF reassured Nigerians that the country’s debt level is moderate and not at high risk. Gita Gopinath recommended targeted social interventions, emphasized the need for domestic revenue mobilization, and stressed the importance of sustaining tight monetary policies to stabilize the economy. Additionally, Nigeria reached a power generation milestone of 6,003 megawatts, reflecting ongoing reforms in the energy sector.
The International Monetary Fund (IMF) has reassured Nigerians that the nation’s debt levels are moderate and not at high risk of causing financial instability. Gita Gopinath, IMF’s First Deputy Managing Director, conveyed this message during an interview in Lagos, recognizing the economic challenges Nigeria currently faces. She advised the federal government to implement targeted social interventions to alleviate these issues.
As of September 30, 2024, Nigeria’s public debt rose to N142.3 trillion, up from N134.3 trillion in June 2024, largely due to currency devaluation. The IMF noted that manageable debt levels allow the nation to meet financial obligations while still having spending flexibility. Gopinath emphasized that achieving sustainability is crucial, as currently, 75% of government revenue is allocated to interest payments, limiting funds for social support and development.
While Gopinath acknowledged Nigeria’s moderate debt risk, she advised against accruing further debts without ensuring a solid revenue base to support them. Recommendations included focusing on domestic revenue mobilization, shifting fuel subsidy savings back to government resources, and improving tax administration. Furthermore, she highlighted the importance of closing tax loopholes and enhancing sectors like security and infrastructure to stimulate investment and economic growth.
Addressing monetary policy, Gopinath recommended a tight approach for the Central Bank of Nigeria (CBN) to stabilize the naira and reduce inflation. She confirmed that ensuring an efficient foreign exchange market is crucial, along with a fiscal policy alignment to maintain manageable deficits. CBN’s appropriate response to inflation trends could lead to a decline in rates over time, contributing to financial stability.
In discussions on social investment, Finance Minister Wale Edun described the government’s focus on enhancing transparency and accountability through biometric systems. He noted advancements in tax reforms and domestic resource mobilization. Additionally, crude oil production levels increased, generating additional revenue for the country.
The recent achievement of 6,003 megawatts in power generation marked a notable milestone for Nigeria, demonstrating progress in the energy sector. This achievement reflects ongoing reforms aimed at addressing energy demands, enhancing efficiency, and encouraging private sector investment.
Minister Adelabu stated that successful tariff adjustments are vital for further improvements in the power sector. With plans for long-term tariff regularization and infrastructure investment, the government aims to reach and sustain upwards of 7,000 megawatts in generation capacity. He highlighted collaboration among stakeholders as essential for transforming Nigeria’s power sector into a catalyst for economic development.
In summary, the IMF has classified Nigeria’s debt situation as moderate, advocating for strategic approaches to enhance economic stability. Key recommendations include improved revenue mobilization, targeted social interventions, and sustained reforms in the power sector. While progress in power generation and broader economic initiatives is promising, continued cooperation between government and stakeholders will be vital for maintaining and improving these achievements.
Original Source: www.arise.tv
