AfDB President – Nigeria must Address Its Debt Problems

Dr. Akinwumi Adesina, President of the African Development Bank, has encouraged the country to take quick action to address debt difficulties, noting that debt servicing costs and inadequate foreign exchange policies are substantial impediments to the country’s economic progress.

Adesina made the remarks on Monday during the Mid-Term Ministerial Performance Review Retreat, which was held both virtually and physically at the Presidential Villa.

He emphasized the importance of repairing the country’s economic framework.

“Nigeria must address its debt challenges decisively,” he stated. The issue is not the debt-to-GDP ratio, as Nigeria’s debt-to-GDP ratio of 35% is still considered reasonable.

“The big question is how to service the debt and what that means for the resources needed for domestic investments to spur faster economic growth.”

“Nigeria’s debt service to revenue ratio is 73%. Things will, of course, improve as oil prices rebound, but the scenario has shown the Nigerian economy’s weakness.

“In order to have an economic resurgence, we need to fix the economy’s structure and address some basic fundamentals.” The difficulty for Nigeria is revenue concentration.”

He requested that structural barriers that limit productivity and revenue-earning potential be removed.

“What is required for sustained growth and economic resurgence is the removal of structural bottlenecks that limit the enormous non-oil sector’s productivity and revenue earning potential,” he added.

The AfDB president also recommended the government increase productivity in the non-oil sector by implementing sound fiscal and macroeconomic policies.

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