Akinwumi Adesina, president of the African Development Bank (AfDB), has called on Nigerian government to “decisively” resolve the country’s debt challenges in order to ignite economic growth.
Adesina, who was Speaking on Monday in Abuja at the opening of a two-day mid-term ministerial performance review retreat said economic resurgence is possible when Nigeria removes “structural bottlenecks” that limit the revenue-earning potential of non-oil sectors.
The AfDB president noted that the country’s debt service to revenue ratio is high.
Adesina said: “Nigeria must decisively tackle its debt challenges. The issue is not about the 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,”
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“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 an economic resurgence, we need to fix the structure of the economy and address some fundamentals.
“Nigeria’s challenge is revenue concentration, as the oil sector accounts for 75.4 % of export revenue and 50 % of all government revenue.
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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.”
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