IMF warns Nigeria, others over high debt service

The International Monetary Fund (IMF) has warned Nigeria and other sub-Saharan African countries of excessive debt services in the respective economies.

According to IMF regional outlook unveiled in Abuja yesterday, debt servicing costs are becoming a burden especially in oil-producing countries, noting that such costs are expected to absorb over 60 per-cent of government revenues in 2017 in Nigeria, Angola and Gabon.

The IMF said in 2016 public debt rose above 50 per cent of gross domestic product (GDP) in 22 subSaharan African countries.

The outlook titled “Fiscal Adjustment and Economic Diversification” was unveiled by the Senior Resident Representative and Mission Chief for Nigeria (Africa Department) Mr. Amine Mati said fiscal consolidation plans needed to be implemented in the region, adding that diversification offers a path to growth.

“Fiscal pressures pose risks to the weakened financial sector in Nigeria and other sub-Saharan Africa countries,” it said.

Noting that debt stocks have risen throughout the region, the IMF stated that exchange rates pressures have eased in many countries, siting the case of Nigeria.

The IMF stressed that the economies in the region are driven by large fiscal deficit and depreciation while debt stocks have risen throughout the region.

But the IMF noted that the region recorded a modest growth recovery but added that the recovery is not sufficient to raise the gross domestic product (GDP) per capital in many countries of the region.