The IMF has declared Nigeria’s debt as moderate and not high risk, urging the government to bolster domestic revenue and social support. The country recently achieved a record power generation capacity of 6,003 megawatts, reflecting ongoing reforms in the electricity sector. Continued efforts in tariff regulation and stakeholder collaboration are highlighted as essential for sustaining improvements and ensuring economic growth.
The International Monetary Fund (IMF) has reassured the Nigerian populace that the country’s debt, currently at N142.3 trillion, is moderate and poses no high risk of a debt crisis. Gita Gopinath, IMF’s First Deputy Managing Director, stated this during an interview in Lagos, emphasizing the importance of the government implementing targeted social interventions to address ongoing economic challenges. This assurance follows concerns about rising debt levels attributed to exchange rate devaluation.
In the fiscal context, Nigeria’s external debt showed a minor increase from $42.90 billion to $43.03 billion between June and September 2024. Gopinath explained that while the debt is deemed moderate and manageable, it is crucial for the government to enhance domestic revenue mobilization to facilitate essential social support and development spending.
Gopinath highlighted that interest payments consume 75% of government revenues, leaving limited resources for social programs. She recommended strategies for increasing revenues such as reducing tax exemptions and improving the efficiency of tax collection through digitalization. Additionally, she underscored the need for enhancing security, infrastructure, and policies to attract investments.
In response to inquiries about sustaining the naira’s exchange rate stability, Gopinath advised maintaining a tight monetary policy to control inflation and stabilize both the currency and the fiscal balance. She stressed the importance of executing robust fiscal and monetary policies for effective economic management.
Highlighting Nigeria’s recent power generation milestone, the federal government announced a peak capacity of 6,003 megawatts, the highest in the nation’s history. This achievement reflects ongoing reforms and the administration’s commitment to ensuring a reliable electricity supply, which is critical for economic growth.
The financing of the power sector is also being addressed through tariff reforms aimed at reflecting the true cost of energy and enhancing private sector participation. Minister of Power, Adebayo Adelabu, noted the need for regularizing tariffs and the cooperation of stakeholders to sustain improvements within the sector. He reiterated that the government aims to increase available electricity generation capacity significantly.
Adelabu has established a planning committee for the upcoming National Council on Power conference, highlighting its importance in relation to ongoing reforms. He emphasized the necessity of coming prepared to address numerous critical issues during this meeting.
The IMF has affirmed that Nigeria’s current debt levels are moderate and manageable. There is a pressing need for the government to enhance domestic revenue and implement effective social interventions to alleviate pressing economic challenges. Furthermore, significant strides have been made within the power sector, as evidenced by record peak generation figures, which underscore the necessity of continued tariff improvements and stakeholder collaboration. The successful navigation of these challenges will be paramount to Nigeria’s economic stability and growth.
Original Source: www.arise.tv
