The International Monetary Fund (IMF) has called on the Federal Government of Nigeria (FGN) to reduce its debt by focusing on increasing the tax basket and compliance as a means of generating revenue to cut borrowing.
The fund in its latest Fiscal Monitor titled, ‘On the path to Policy Normalisation’, released yesterday noted that Nigeria’s debt is projected to continue to rise and urged the government to remove fuel subsidies and direct them towards health and education.
The Minister of Finance, Budget, and National Planning, Zainab Ahmed, last week said Nigeria had secured a World Bank facility worth $800 million as the first tranche of palliatives to be disbursed through cash transfers to about 50 million Nigerians, who belong to the most vulnerable category in the society, to cushion effects of a planned removal of petrol subsidy by June.
The loan document, which was sighted by Daily Trust revealed that the facility agreement, which was signed by both parties, the Nigerian government and IDA, on 16 August 2022, comes with a commitment charge rate of 0.5 percent per year and a service charge of 0.75% per year on the withdrawn credit balance, as well as an interest charge of 1.25% per year on the withdrawn credit balance.
