The President of the Africa Development Bank (AfDB), Akinwumi Adesina, has urged the Nigerian Government to tackle rising debt “decisively”, noting the high debt service to revenue ratio, which stands at a towering 73 percent.
He said this at the Mid-Term Ministerial Performance Review retreat, in Abuja, estimating a positive economic outlook on Nigeria’s economy, boosted by improved oil prices.
Adesina said, “The GDP growth rate for the continent will recover to 3.4% this year. We project Nigeria’s economic growth rate will rebound to 2.4% this year and reach 2.9% by 2022.
“Nigeria must decisively tackle its debt challenges. The issue is not about debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio at 35% is still moderate. 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 ratio of Nigeria is high at 73%.
“Things will improve as oil prices recover, but the situation has revealed the vulnerability of Nigeria’s economy. To have economic resurgence, we need to fix the structure of the economy and address some fundamentals.
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“What is needed for sustained growth and economic resurgence is to remove the structural bottlenecks that limit the productivity and the revenue earning potential of the huge non-oil sectors.
“Much will depend on the ports of Nigeria.
“According to the sector operators, the cost of exporting 100 tons of cargo in Nigeria is $35,000, compared to $4,000 in Ghana. Today, the leading ports for West Africa are in Cote d’Ivoire, Ghana, Togo, and Benin Republic. All these countries have modernized their port management systems, leaving Nigeria far behind.”
