The World Bank says Nigeria’s constant fiscal deficit has worsened the nation’s public debt stock, with 96.3 percent of government revenue spent on servicing debt in 2022.
This was according to the Macro Poverty Outlook for Nigeria: April 2023 brief released by the bank.
The report read in part, “The fiscal position deteriorated. In 2022, the cost of the petrol subsidy increased from 0.7 percent to 2.3 percent of GDP. Low non-oil revenues and high-interest payments compounded fiscal pressures.
The fiscal deficit was estimated at 5.0 percent of GDP in 2022, breaching the stipulated limit for a federal fiscal deficit of 3 percent. This has kept the public debt stock at over 38 percent of GDP and pushed the debt service to revenue ratio from 83.2 percent in 2021 to 96.3 percent in 2022.”
The bank also said that the cash scarcity created by the CBN’s naira redesign policy hampered the country’s economic growth and poverty reduction efforts, adding that about 13 million Nigerians would become poor between 2019 and 2025.
